Correlation Between INNOX Advanced and Foodnamoo
Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and Foodnamoo 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 Foodnamoo 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 Foodnamoo, you can compare the effects of market volatilities on INNOX Advanced and Foodnamoo 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 Foodnamoo. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and Foodnamoo.
Diversification Opportunities for INNOX Advanced and Foodnamoo
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INNOX and Foodnamoo is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and Foodnamoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foodnamoo 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 Foodnamoo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foodnamoo has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and Foodnamoo go up and down completely randomly.
Pair Corralation between INNOX Advanced and Foodnamoo
Assuming the 90 days trading horizon INNOX Advanced Materials is expected to generate 1.29 times more return on investment than Foodnamoo. However, INNOX Advanced is 1.29 times more volatile than Foodnamoo. It trades about 0.15 of its potential returns per unit of risk. Foodnamoo is currently generating about -0.09 per unit of risk. If you would invest 2,221,880 in INNOX Advanced Materials on November 9, 2024 and sell it today you would earn a total of 698,120 from holding INNOX Advanced Materials or generate 31.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INNOX Advanced Materials vs. Foodnamoo
Performance |
| Timeline |
| INNOX Advanced Materials |
| Foodnamoo |
INNOX Advanced and Foodnamoo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INNOX Advanced and Foodnamoo
The main advantage of trading using opposite INNOX Advanced and Foodnamoo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INNOX Advanced position performs unexpectedly, Foodnamoo 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 Foodnamoo will offset losses from the drop in Foodnamoo's long position.| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. LX Semicon Co | INNOX Advanced vs. Tokai Carbon Korea | INNOX Advanced vs. People Technology |
| Foodnamoo vs. Cherrybro coLtd | Foodnamoo vs. Busan Industrial Co | Foodnamoo vs. Busan Ind | Foodnamoo vs. Mirae Asset Daewoo |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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