Correlation Between Innometry and Hyundai Rotem
Can any of the company-specific risk be diversified away by investing in both Innometry and Hyundai Rotem 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 Hyundai Rotem into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innometry Co and Hyundai Rotem Co, you can compare the effects of market volatilities on Innometry and Hyundai Rotem 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 Hyundai Rotem. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innometry and Hyundai Rotem.
Diversification Opportunities for Innometry and Hyundai Rotem
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Innometry and Hyundai is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Hyundai Rotem Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Rotem 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 Hyundai Rotem. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Rotem has no effect on the direction of Innometry i.e., Innometry and Hyundai Rotem go up and down completely randomly.
Pair Corralation between Innometry and Hyundai Rotem
Assuming the 90 days trading horizon Innometry Co is expected to generate 0.58 times more return on investment than Hyundai Rotem. However, Innometry Co is 1.73 times less risky than Hyundai Rotem. It trades about -0.29 of its potential returns per unit of risk. Hyundai Rotem Co is currently generating about -0.21 per unit of risk. If you would invest 912,000 in Innometry Co on September 4, 2024 and sell it today you would lose (137,000) from holding Innometry Co or give up 15.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Innometry Co vs. Hyundai Rotem Co
Performance |
| Timeline |
| Innometry |
| Hyundai Rotem |
Innometry and Hyundai Rotem Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innometry and Hyundai Rotem
The main advantage of trading using opposite Innometry and Hyundai Rotem positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innometry position performs unexpectedly, Hyundai Rotem 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 Hyundai Rotem will offset losses from the drop in Hyundai Rotem's long position.| Innometry vs. Daejoo Electronic Materials | Innometry vs. Parksystems Corp | Innometry vs. BH Co | Innometry vs. Partron Co |
| Hyundai Rotem vs. Hyosung Chemical Corp | Hyundai Rotem vs. Kyung In Synthetic Corp | Hyundai Rotem vs. JC Chemical Co | Hyundai Rotem vs. Sung Bo Chemicals |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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