Correlation Between InnoTherapy and Adaptive Plasma
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and Adaptive Plasma 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 Adaptive Plasma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and Adaptive Plasma Technology, you can compare the effects of market volatilities on InnoTherapy and Adaptive Plasma 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 Adaptive Plasma. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and Adaptive Plasma.
Diversification Opportunities for InnoTherapy and Adaptive Plasma
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between InnoTherapy and Adaptive is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and Adaptive Plasma Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adaptive Plasma Tech 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 Adaptive Plasma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adaptive Plasma Tech has no effect on the direction of InnoTherapy i.e., InnoTherapy and Adaptive Plasma go up and down completely randomly.
Pair Corralation between InnoTherapy and Adaptive Plasma
Assuming the 90 days trading horizon InnoTherapy is expected to generate 0.49 times more return on investment than Adaptive Plasma. However, InnoTherapy is 2.06 times less risky than Adaptive Plasma. It trades about 0.01 of its potential returns per unit of risk. Adaptive Plasma Technology is currently generating about -0.06 per unit of risk. If you would invest 963,000 in InnoTherapy on November 1, 2024 and sell it today you would earn a total of 10,000 from holding InnoTherapy or generate 1.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. Adaptive Plasma Technology
Performance |
| Timeline |
| InnoTherapy |
| Adaptive Plasma Tech |
InnoTherapy and Adaptive Plasma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and Adaptive Plasma
The main advantage of trading using opposite InnoTherapy and Adaptive Plasma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, Adaptive Plasma 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 Adaptive Plasma will offset losses from the drop in Adaptive Plasma's long position.| InnoTherapy vs. LG Household Healthcare | InnoTherapy vs. Neungyule Education | InnoTherapy vs. TS Investment Corp | InnoTherapy vs. Atinum Investment Co |
| Adaptive Plasma vs. Ssangyong Information Communication | Adaptive Plasma vs. Lotte Data Communication | Adaptive Plasma vs. Anam Electronics Co | Adaptive Plasma vs. ABCO Electronics 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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