Correlation Between INNOX Advanced and SCI Information
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and SCI Information 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 SCI Information 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 SCI Information Service, you can compare the effects of market volatilities on INNOX Advanced and SCI Information 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 SCI Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and SCI Information.
Diversification Opportunities for INNOX Advanced and SCI Information
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INNOX and SCI is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and SCI Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Information Service 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 SCI Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Information Service has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and SCI Information go up and down completely randomly.
Pair Corralation between INNOX Advanced and SCI Information
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to under-perform the SCI Information. In addition to that, INNOX Advanced is 1.03 times more volatile than SCI Information Service. It trades about -0.06 of its total potential returns per unit of risk. SCI Information Service is currently generating about -0.05 per unit of volatility. If you would invest 383,572 in SCI Information Service on September 4, 2024 and sell it today you would lose (179,572) from holding SCI Information Service or give up 46.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. SCI Information Service
Performance |
| Timeline |
| INNOX Advanced Materials |
| SCI Information Service |
INNOX Advanced and SCI Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and SCI Information
The main advantage of trading using opposite INNOX Advanced and SCI Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, SCI Information 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 SCI Information will offset losses from the drop in SCI Information's long position.| INNOX Advanced vs. Haesung Industrial Co | INNOX Advanced vs. Dongbang Transport Logistics | INNOX Advanced vs. RF Materials Co | INNOX Advanced vs. Union Materials Corp |
| SCI Information vs. Dongjin Semichem Co | SCI Information vs. AhnLab Inc | SCI Information vs. Posco ICT | SCI Information vs. CJ ENM |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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