Correlation Between IQuest and Okins Electronics
Can any of the company-specific risk be diversified away by investing in both IQuest and Okins 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 IQuest and Okins Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IQuest Co and Okins Electronics Co, you can compare the effects of market volatilities on IQuest and Okins 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 IQuest with a short position of Okins Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of IQuest and Okins Electronics.
Diversification Opportunities for IQuest and Okins Electronics
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between IQuest and Okins is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding IQuest Co and Okins Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Okins Electronics and IQuest 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 IQuest Co are associated (or correlated) with Okins Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Okins Electronics has no effect on the direction of IQuest i.e., IQuest and Okins Electronics go up and down completely randomly.
Pair Corralation between IQuest and Okins Electronics
Assuming the 90 days trading horizon IQuest Co is expected to generate 1.76 times more return on investment than Okins Electronics. However, IQuest is 1.76 times more volatile than Okins Electronics Co. It trades about 0.15 of its potential returns per unit of risk. Okins Electronics Co is currently generating about -0.58 per unit of risk. If you would invest 218,500 in IQuest Co on August 30, 2024 and sell it today you would earn a total of 24,000 from holding IQuest Co or generate 10.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IQuest Co vs. Okins Electronics Co
Performance |
| Timeline |
| IQuest |
| Okins Electronics |
IQuest and Okins Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IQuest and Okins Electronics
The main advantage of trading using opposite IQuest and Okins Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IQuest position performs unexpectedly, Okins 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 Okins Electronics will offset losses from the drop in Okins Electronics' long position.| IQuest vs. Anam Electronics Co | IQuest vs. Samyoung Electronics Co | IQuest vs. Iljin Materials Co | IQuest vs. Sungwoo Electronics Co |
| Okins Electronics vs. Daou Data Corp | Okins Electronics vs. Busan Industrial Co | Okins Electronics vs. Busan Ind | Okins Electronics vs. Shinhan WTI Futures |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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