Correlation Between INNOX Advanced and Global Standard
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and Global Standard 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 Global Standard 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 Global Standard Technology, you can compare the effects of market volatilities on INNOX Advanced and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Global Standard.
Diversification Opportunities for INNOX Advanced and Global Standard
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INNOX and Global is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and Global Standard go up and down completely randomly.
Pair Corralation between INNOX Advanced and Global Standard
Assuming the 90 days trading horizon INNOX Advanced is expected to generate 5.18 times less return on investment than Global Standard. But when comparing it to its historical volatility, INNOX Advanced Materials is 1.21 times less risky than Global Standard. It trades about 0.01 of its potential returns per unit of risk. Global Standard Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,662,471 in Global Standard Technology on October 14, 2024 and sell it today you would earn a total of 159,529 from holding Global Standard Technology or generate 9.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Global Standard Technology
Performance |
| Timeline |
| INNOX Advanced Materials |
| Global Standard Tech |
INNOX Advanced and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Global Standard
The main advantage of trading using opposite INNOX Advanced and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| INNOX Advanced vs. Samyang Foods Co | INNOX Advanced vs. Samlip General Foods | INNOX Advanced vs. FoodNamoo | INNOX Advanced vs. Jinro Distillers Co |
| Global Standard vs. Ssangyong Materials Corp | Global Standard vs. Hotel Shilla Co | Global Standard vs. INNOX Advanced Materials | Global Standard vs. Hyundai Engineering Plastics |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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