Correlation Between InnoTherapy and PH Tech
Can any of the company-specific risk be diversified away by investing in both InnoTherapy and PH Tech 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 PH Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InnoTherapy and PH Tech Co, you can compare the effects of market volatilities on InnoTherapy and PH Tech 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 PH Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of InnoTherapy and PH Tech.
Diversification Opportunities for InnoTherapy and PH Tech
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between InnoTherapy and 239890 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding InnoTherapy and PH Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PH 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 PH Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PH Tech has no effect on the direction of InnoTherapy i.e., InnoTherapy and PH Tech go up and down completely randomly.
Pair Corralation between InnoTherapy and PH Tech
Assuming the 90 days trading horizon InnoTherapy is expected to under-perform the PH Tech. But the stock apears to be less risky and, when comparing its historical volatility, InnoTherapy is 2.05 times less risky than PH Tech. The stock trades about -0.46 of its potential returns per unit of risk. The PH Tech Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 775,000 in PH Tech Co on November 28, 2024 and sell it today you would lose (2,000) from holding PH Tech Co or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
InnoTherapy vs. PH Tech Co
Performance |
| Timeline |
| InnoTherapy |
| PH Tech |
InnoTherapy and PH Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InnoTherapy and PH Tech
The main advantage of trading using opposite InnoTherapy and PH Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InnoTherapy position performs unexpectedly, PH Tech 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 PH Tech will offset losses from the drop in PH Tech's long position.| InnoTherapy vs. Daishin Information Communications | InnoTherapy vs. Hannong Chemicals | InnoTherapy vs. Korea Information Communications | InnoTherapy vs. Hanmi Semiconductor Co |
| PH Tech vs. Moadata Co | PH Tech vs. Dongnam Chemical Co | PH Tech vs. Hanmi Semiconductor Co | PH Tech vs. LG Household Healthcare |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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