Correlation Between INNOX Advanced and Digital Power
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and Digital Power 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 INNOX Advanced and Digital Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INNOX Advanced Materials and Digital Power Communications, you can compare the effects of market volatilities on INNOX Advanced and Digital Power 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 INNOX Advanced with a short position of Digital Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Digital Power.
Diversification Opportunities for INNOX Advanced and Digital Power
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INNOX and Digital is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Digital Power Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Power Commun and INNOX Advanced 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 INNOX Advanced Materials are associated (or correlated) with Digital Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Power Commun has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and Digital Power go up and down completely randomly.
Pair Corralation between INNOX Advanced and Digital Power
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to under-perform the Digital Power. In addition to that, INNOX Advanced is 1.04 times more volatile than Digital Power Communications. It trades about -0.06 of its total potential returns per unit of risk. Digital Power Communications is currently generating about 0.04 per unit of volatility. If you would invest 697,000 in Digital Power Communications on August 27, 2024 and sell it today you would earn a total of 83,000 from holding Digital Power Communications or generate 11.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Digital Power Communications
Performance |
| Timeline |
| INNOX Advanced Materials |
| Digital Power Commun |
INNOX Advanced and Digital Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Digital Power
The main advantage of trading using opposite INNOX Advanced and Digital Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, Digital Power 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 Digital Power will offset losses from the drop in Digital Power's long position.| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. People Technology | INNOX Advanced vs. SIMMTECH Co | INNOX Advanced vs. Haesung DS Co |
| Digital Power vs. AptaBio Therapeutics | Digital Power vs. Daewoo SBI SPAC | Digital Power vs. Dream Security co | Digital Power vs. Microfriend |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |