Correlation Between InnoTherapy and Samji Electronics
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and Samji Electronics 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 Samji Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and Samji Electronics Co, you can compare the effects of market volatilities on InnoTherapy and Samji Electronics 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 Samji Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and Samji Electronics.
Diversification Opportunities for InnoTherapy and Samji Electronics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InnoTherapy and Samji is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and Samji Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samji Electronics 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 Samji Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samji Electronics has no effect on the direction of InnoTherapy i.e., InnoTherapy and Samji Electronics go up and down completely randomly.
Pair Corralation between InnoTherapy and Samji Electronics
Assuming the 90 days trading horizon InnoTherapy is expected to generate 2.8 times more return on investment than Samji Electronics. However, InnoTherapy is 2.8 times more volatile than Samji Electronics Co. It trades about 0.46 of its potential returns per unit of risk. Samji Electronics Co is currently generating about 0.35 per unit of risk. If you would invest 827,000 in InnoTherapy on November 5, 2024 and sell it today you would earn a total of 175,000 from holding InnoTherapy or generate 21.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. Samji Electronics Co
Performance |
| Timeline |
| InnoTherapy |
| Samji Electronics |
InnoTherapy and Samji Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and Samji Electronics
The main advantage of trading using opposite InnoTherapy and Samji Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, Samji Electronics 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 Samji Electronics will offset losses from the drop in Samji Electronics' long position.| InnoTherapy vs. Iljin Display | InnoTherapy vs. Nice Information Telecommunication | InnoTherapy vs. Korea Computer | InnoTherapy vs. AeroSpace Technology of |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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