Correlation Between INNOX Advanced and Naver
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and Naver 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 Naver 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 Naver, you can compare the effects of market volatilities on INNOX Advanced and Naver 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 Naver. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Naver.
Diversification Opportunities for INNOX Advanced and Naver
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between INNOX and Naver is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Naver in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naver 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 Naver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naver has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and Naver go up and down completely randomly.
Pair Corralation between INNOX Advanced and Naver
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 1.86 times more return on investment than Naver. However, INNOX Advanced is 1.86 times more volatile than Naver. It trades about 0.43 of its potential returns per unit of risk. Naver is currently generating about 0.14 per unit of risk. If you would invest 2,130,000 in INNOX Advanced Materials on November 6, 2024 and sell it today you would earn a total of 580,000 from holding INNOX Advanced Materials or generate 27.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Naver
Performance |
| Timeline |
| INNOX Advanced Materials |
| Naver |
INNOX Advanced and Naver Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Naver
The main advantage of trading using opposite INNOX Advanced and Naver positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, Naver 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 Naver will offset losses from the drop in Naver's long position.| INNOX Advanced vs. Jb Financial | INNOX Advanced vs. Bookook Steel | INNOX Advanced vs. Dgb Financial | INNOX Advanced vs. KakaoBank Corp |
| Naver vs. Atinum Investment Co | Naver vs. Inzi Display CoLtd | Naver vs. SV Investment | Naver vs. Pureun Mutual Savings |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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