Correlation Between InnoTherapy and Dong A
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and Dong A 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 Dong A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and Dong A Eltek, you can compare the effects of market volatilities on InnoTherapy and Dong A 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 Dong A. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and Dong A.
Diversification Opportunities for InnoTherapy and Dong A
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between InnoTherapy and Dong is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and Dong A Eltek in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dong A Eltek 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 Dong A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dong A Eltek has no effect on the direction of InnoTherapy i.e., InnoTherapy and Dong A go up and down completely randomly.
Pair Corralation between InnoTherapy and Dong A
Assuming the 90 days trading horizon InnoTherapy is expected to generate 24.23 times less return on investment than Dong A. But when comparing it to its historical volatility, InnoTherapy is 2.08 times less risky than Dong A. It trades about 0.0 of its potential returns per unit of risk. Dong A Eltek is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 300,667 in Dong A Eltek on September 14, 2024 and sell it today you would earn a total of 97,333 from holding Dong A Eltek or generate 32.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.62% |
| Values | Daily Returns |
InnoTherapy vs. Dong A Eltek
Performance |
| Timeline |
| InnoTherapy |
| Dong A Eltek |
InnoTherapy and Dong A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and Dong A
The main advantage of trading using opposite InnoTherapy and Dong A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, Dong A 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 Dong A will offset losses from the drop in Dong A's long position.| InnoTherapy vs. Kolon Life Science | InnoTherapy vs. JETEMA Co | InnoTherapy vs. Aminologics CoLtd | InnoTherapy vs. HLB Pharmaceutical Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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