Correlation Between Innometry and Korea Refractories
Can any of the company-specific risk be diversified away by investing in both Innometry and Korea Refractories 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 Korea Refractories into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and Korea Refractories Co, you can compare the effects of market volatilities on Innometry and Korea Refractories 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 Korea Refractories. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and Korea Refractories.
Diversification Opportunities for Innometry and Korea Refractories
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innometry and Korea is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Korea Refractories Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Refractories 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 Korea Refractories. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Refractories has no effect on the direction of Innometry i.e., Innometry and Korea Refractories go up and down completely randomly.
Pair Corralation between Innometry and Korea Refractories
Assuming the 90 days trading horizon Innometry Co is expected to under-perform the Korea Refractories. In addition to that, Innometry is 1.53 times more volatile than Korea Refractories Co. It trades about -0.08 of its total potential returns per unit of risk. Korea Refractories Co is currently generating about -0.09 per unit of volatility. If you would invest 277,500 in Korea Refractories Co on September 3, 2024 and sell it today you would lose (65,500) from holding Korea Refractories Co or give up 23.6% 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. Korea Refractories Co
Performance |
| Timeline |
| Innometry |
| Korea Refractories |
Innometry and Korea Refractories Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and Korea Refractories
The main advantage of trading using opposite Innometry and Korea Refractories positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, Korea Refractories 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 Korea Refractories will offset losses from the drop in Korea Refractories' long position.| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron Co |
| Korea Refractories vs. Eagon Industrial Co | Korea Refractories vs. Shinhan Financial Group | Korea Refractories vs. Korean Reinsurance Co | Korea Refractories vs. Seoul Food Industrial |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |