Correlation Between Innometry and BooKook Steel
Can any of the company-specific risk be diversified away by investing in both Innometry and BooKook Steel 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 BooKook Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and BooKook Steel Co, you can compare the effects of market volatilities on Innometry and BooKook Steel 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 BooKook Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and BooKook Steel.
Diversification Opportunities for Innometry and BooKook Steel
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innometry and BooKook is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and BooKook Steel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BooKook Steel 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 BooKook Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BooKook Steel has no effect on the direction of Innometry i.e., Innometry and BooKook Steel go up and down completely randomly.
Pair Corralation between Innometry and BooKook Steel
Assuming the 90 days trading horizon Innometry Co is expected to under-perform the BooKook Steel. In addition to that, Innometry is 1.42 times more volatile than BooKook Steel Co. It trades about -0.22 of its total potential returns per unit of risk. BooKook Steel Co is currently generating about -0.06 per unit of volatility. If you would invest 249,500 in BooKook Steel Co on August 31, 2024 and sell it today you would lose (6,000) from holding BooKook Steel Co or give up 2.4% 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. BooKook Steel Co
Performance |
| Timeline |
| Innometry |
| BooKook Steel |
Innometry and BooKook Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and BooKook Steel
The main advantage of trading using opposite Innometry and BooKook Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, BooKook Steel 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 BooKook Steel will offset losses from the drop in BooKook Steel's long position.| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron Co |
| BooKook Steel vs. AptaBio Therapeutics | BooKook Steel vs. Daewoo SBI SPAC | BooKook Steel vs. Dream Security co | BooKook Steel 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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