Correlation Between INNOX Advanced and EV Advanced
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and EV Advanced 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 EV Advanced 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 EV Advanced Material, you can compare the effects of market volatilities on INNOX Advanced and EV Advanced 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 EV Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and EV Advanced.
Diversification Opportunities for INNOX Advanced and EV Advanced
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INNOX and 131400 is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and EV Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EV Advanced Material 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 EV Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EV Advanced Material has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and EV Advanced go up and down completely randomly.
Pair Corralation between INNOX Advanced and EV Advanced
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 0.58 times more return on investment than EV Advanced. However, INNOX Advanced Materials is 1.73 times less risky than EV Advanced. It trades about -0.04 of its potential returns per unit of risk. EV Advanced Material is currently generating about -0.04 per unit of risk. If you would invest 3,869,340 in INNOX Advanced Materials on August 29, 2024 and sell it today you would lose (1,604,340) from holding INNOX Advanced Materials or give up 41.46% 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. EV Advanced Material
Performance |
| Timeline |
| INNOX Advanced Materials |
| EV Advanced Material |
INNOX Advanced and EV Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and EV Advanced
The main advantage of trading using opposite INNOX Advanced and EV Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, EV Advanced 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 EV Advanced will offset losses from the drop in EV Advanced's long position.| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. People Technology | INNOX Advanced vs. SIMMTECH Co | INNOX Advanced vs. Haesung DS Co |
| EV Advanced vs. Korea Real Estate | EV Advanced vs. Korea Ratings Co | EV Advanced vs. IQuest Co | EV Advanced vs. Wonbang Tech Co |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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