Correlation Between InnoTherapy and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and Shinsegae Food at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining InnoTherapy and Shinsegae Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and Shinsegae Food, you can compare the effects of market volatilities on InnoTherapy and Shinsegae Food and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in InnoTherapy with a short position of Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and Shinsegae Food.
Diversification Opportunities for InnoTherapy and Shinsegae Food
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InnoTherapy and Shinsegae is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food and InnoTherapy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on InnoTherapy are associated (or correlated) with Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of InnoTherapy i.e., InnoTherapy and Shinsegae Food go up and down completely randomly.
Pair Corralation between InnoTherapy and Shinsegae Food
Assuming the 90 days trading horizon InnoTherapy is expected to generate 1.16 times more return on investment than Shinsegae Food. However, InnoTherapy is 1.16 times more volatile than Shinsegae Food. It trades about -0.08 of its potential returns per unit of risk. Shinsegae Food is currently generating about -0.11 per unit of risk. If you would invest 1,060,000 in InnoTherapy on September 3, 2024 and sell it today you would lose (200,000) from holding InnoTherapy or give up 18.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. Shinsegae Food
Performance |
| Timeline |
| InnoTherapy |
| Shinsegae Food |
InnoTherapy and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and Shinsegae Food
The main advantage of trading using opposite InnoTherapy and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, Shinsegae Food can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| InnoTherapy vs. Kolon Life Science | InnoTherapy vs. JETEMA Co | InnoTherapy vs. Aminologics CoLtd | InnoTherapy vs. Daihan Pharmaceutical CoLtd |
| Shinsegae Food vs. Korea Real Estate | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. UNISEM Co | Shinsegae Food vs. RPBio Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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