Correlation Between Innometry and Songwon Industrial
Can any of the company-specific risk be diversified away by investing in both Innometry and Songwon Industrial 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 Innometry and Songwon Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and Songwon Industrial Co, you can compare the effects of market volatilities on Innometry and Songwon Industrial 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 Innometry with a short position of Songwon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and Songwon Industrial.
Diversification Opportunities for Innometry and Songwon Industrial
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innometry and Songwon is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Songwon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Songwon Industrial and Innometry 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 Innometry Co are associated (or correlated) with Songwon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Songwon Industrial has no effect on the direction of Innometry i.e., Innometry and Songwon Industrial go up and down completely randomly.
Pair Corralation between Innometry and Songwon Industrial
Assuming the 90 days trading horizon Innometry Co is expected to under-perform the Songwon Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Innometry Co is 1.54 times less risky than Songwon Industrial. The stock trades about -0.15 of its potential returns per unit of risk. The Songwon Industrial Co is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,116,000 in Songwon Industrial Co on October 15, 2024 and sell it today you would earn a total of 115,000 from holding Songwon Industrial Co or generate 10.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innometry Co vs. Songwon Industrial Co
Performance |
| Timeline |
| Innometry |
| Songwon Industrial |
Innometry and Songwon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and Songwon Industrial
The main advantage of trading using opposite Innometry and Songwon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, Songwon Industrial 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 Songwon Industrial will offset losses from the drop in Songwon Industrial's long position.| Innometry vs. KPX Green Chemical | Innometry vs. Tae Kyung Chemical | Innometry vs. Miwon Chemical | Innometry vs. FOODWELL Co |
| Songwon Industrial vs. Sung Bo Chemicals | Songwon Industrial vs. Daewon Chemical Co | Songwon Industrial vs. Youngbo Chemical Co | Songwon Industrial vs. TK 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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