Correlation Between SV Investment and Innometry
Can any of the company-specific risk be diversified away by investing in both SV Investment and Innometry 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 SV Investment and Innometry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SV Investment and Innometry Co, you can compare the effects of market volatilities on SV Investment and Innometry 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 SV Investment with a short position of Innometry. Check out your portfolio center. Please also check ongoing floating volatility patterns of SV Investment and Innometry.
Diversification Opportunities for SV Investment and Innometry
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between 289080 and Innometry is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SV Investment and Innometry Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innometry and SV Investment 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 SV Investment are associated (or correlated) with Innometry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innometry has no effect on the direction of SV Investment i.e., SV Investment and Innometry go up and down completely randomly.
Pair Corralation between SV Investment and Innometry
Assuming the 90 days trading horizon SV Investment is expected to generate 0.89 times more return on investment than Innometry. However, SV Investment is 1.13 times less risky than Innometry. It trades about 0.08 of its potential returns per unit of risk. Innometry Co is currently generating about -0.11 per unit of risk. If you would invest 133,300 in SV Investment on October 14, 2024 and sell it today you would earn a total of 2,900 from holding SV Investment or generate 2.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SV Investment vs. Innometry Co
Performance |
| Timeline |
| SV Investment |
| Innometry |
SV Investment and Innometry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SV Investment and Innometry
The main advantage of trading using opposite SV Investment and Innometry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SV Investment position performs unexpectedly, Innometry 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 Innometry will offset losses from the drop in Innometry's long position.| SV Investment vs. Korea Air Svc | SV Investment vs. Jin Air Co | SV Investment vs. Kyung Chang Industrial | SV Investment vs. PJ Metal Co |
| Innometry vs. KCC Engineering Construction | Innometry vs. Korea Investment Holdings | Innometry vs. Nam Hwa Construction | Innometry vs. SV Investment |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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