Correlation Between Innometry and Eagon Industrial
Can any of the company-specific risk be diversified away by investing in both Innometry and Eagon 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 Eagon 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 Eagon Industrial Co, you can compare the effects of market volatilities on Innometry and Eagon 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 Eagon Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and Eagon Industrial.
Diversification Opportunities for Innometry and Eagon Industrial
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innometry and Eagon is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Eagon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagon 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 Eagon Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagon Industrial has no effect on the direction of Innometry i.e., Innometry and Eagon Industrial go up and down completely randomly.
Pair Corralation between Innometry and Eagon Industrial
Assuming the 90 days trading horizon Innometry Co is expected to under-perform the Eagon Industrial. In addition to that, Innometry is 3.32 times more volatile than Eagon Industrial Co. It trades about -0.21 of its total potential returns per unit of risk. Eagon Industrial Co is currently generating about -0.09 per unit of volatility. If you would invest 501,000 in Eagon Industrial Co on August 29, 2024 and sell it today you would lose (7,500) from holding Eagon Industrial Co or give up 1.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innometry Co vs. Eagon Industrial Co
Performance |
| Timeline |
| Innometry |
| Eagon Industrial |
Innometry and Eagon Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and Eagon Industrial
The main advantage of trading using opposite Innometry and Eagon Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, Eagon 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 Eagon Industrial will offset losses from the drop in Eagon Industrial's long position.| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron Co |
| Eagon Industrial vs. AptaBio Therapeutics | Eagon Industrial vs. Daewoo SBI SPAC | Eagon Industrial vs. Dream Security co | Eagon Industrial vs. Microfriend |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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