Correlation Between InnoTherapy and JETEMA
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and JETEMA 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 JETEMA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and JETEMA Co, you can compare the effects of market volatilities on InnoTherapy and JETEMA 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 JETEMA. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and JETEMA.
Diversification Opportunities for InnoTherapy and JETEMA
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InnoTherapy and JETEMA is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and JETEMA Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JETEMA 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 JETEMA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JETEMA has no effect on the direction of InnoTherapy i.e., InnoTherapy and JETEMA go up and down completely randomly.
Pair Corralation between InnoTherapy and JETEMA
Assuming the 90 days trading horizon InnoTherapy is expected to generate 1.0 times more return on investment than JETEMA. However, InnoTherapy is 1.0 times less risky than JETEMA. It trades about 0.01 of its potential returns per unit of risk. JETEMA Co is currently generating about 0.0 per unit of risk. If you would invest 849,000 in InnoTherapy on August 28, 2024 and sell it today you would lose (1,000.00) from holding InnoTherapy or give up 0.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InnoTherapy vs. JETEMA Co
Performance |
| Timeline |
| InnoTherapy |
| JETEMA |
InnoTherapy and JETEMA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and JETEMA
The main advantage of trading using opposite InnoTherapy and JETEMA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, JETEMA 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 JETEMA will offset losses from the drop in JETEMA's long position.| InnoTherapy vs. Taeyang Metal Industrial | InnoTherapy vs. Kakao Games Corp | InnoTherapy vs. Samhyun Steel Co | InnoTherapy vs. Gyeongnam Steel Co |
| JETEMA vs. Kolon Life Science | JETEMA vs. Aminologics CoLtd | JETEMA vs. Withuspharmaceutical CoLtd | JETEMA vs. High Tech Pharm |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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