Correlation Between InnoTherapy and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and Jeong Moon 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 Jeong Moon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and Jeong Moon Information, you can compare the effects of market volatilities on InnoTherapy and Jeong Moon 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 Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and Jeong Moon.
Diversification Opportunities for InnoTherapy and Jeong Moon
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InnoTherapy and Jeong is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information 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 Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of InnoTherapy i.e., InnoTherapy and Jeong Moon go up and down completely randomly.
Pair Corralation between InnoTherapy and Jeong Moon
Assuming the 90 days trading horizon InnoTherapy is expected to generate 1.52 times more return on investment than Jeong Moon. However, InnoTherapy is 1.52 times more volatile than Jeong Moon Information. It trades about 0.09 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.21 per unit of risk. If you would invest 806,000 in InnoTherapy on September 2, 2024 and sell it today you would earn a total of 31,000 from holding InnoTherapy or generate 3.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. Jeong Moon Information
Performance |
| Timeline |
| InnoTherapy |
| Jeong Moon Information |
InnoTherapy and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and Jeong Moon
The main advantage of trading using opposite InnoTherapy and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| InnoTherapy vs. Nable Communications | InnoTherapy vs. Korea Computer | InnoTherapy vs. Jinro Distillers Co | InnoTherapy vs. Homecast CoLtd |
| Jeong Moon vs. Dongsin Engineering Construction | Jeong Moon vs. Doosan Fuel Cell | Jeong Moon vs. Daishin Balance 1 | Jeong Moon vs. Total Soft Bank |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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