Correlation Between INNOX Advanced and Vissem Electronics
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and Vissem 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 INNOX Advanced and Vissem Electronics 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 Vissem Electronics Co, you can compare the effects of market volatilities on INNOX Advanced and Vissem 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 INNOX Advanced with a short position of Vissem Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Vissem Electronics.
Diversification Opportunities for INNOX Advanced and Vissem Electronics
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between INNOX and Vissem is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Vissem Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vissem Electronics 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 Vissem Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vissem Electronics has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and Vissem Electronics go up and down completely randomly.
Pair Corralation between INNOX Advanced and Vissem Electronics
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 1.57 times more return on investment than Vissem Electronics. However, INNOX Advanced is 1.57 times more volatile than Vissem Electronics Co. It trades about 0.01 of its potential returns per unit of risk. Vissem Electronics Co is currently generating about -0.05 per unit of risk. If you would invest 2,482,410 in INNOX Advanced Materials on October 14, 2024 and sell it today you would lose (2,410) from holding INNOX Advanced Materials or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Vissem Electronics Co
Performance |
| Timeline |
| INNOX Advanced Materials |
| Vissem Electronics |
INNOX Advanced and Vissem Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Vissem Electronics
The main advantage of trading using opposite INNOX Advanced and Vissem Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, Vissem 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 Vissem Electronics will offset losses from the drop in Vissem Electronics' long position.| INNOX Advanced vs. Samyang Foods Co | INNOX Advanced vs. Samlip General Foods | INNOX Advanced vs. FoodNamoo | INNOX Advanced vs. Jinro Distillers Co |
| Vissem Electronics vs. Youngchang Chemical Co | Vissem Electronics vs. INNOX Advanced Materials | Vissem Electronics vs. SH Energy Chemical | Vissem Electronics vs. Youl Chon Chemical |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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