Correlation Between Innolux Corp and Nan Ya
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Nan Ya 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 Innolux Corp and Nan Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Nan Ya Plastics, you can compare the effects of market volatilities on Innolux Corp and Nan Ya 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 Innolux Corp with a short position of Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Nan Ya.
Diversification Opportunities for Innolux Corp and Nan Ya
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innolux and Nan is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Nan Ya Plastics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Plastics and Innolux Corp 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 Innolux Corp are associated (or correlated) with Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Plastics has no effect on the direction of Innolux Corp i.e., Innolux Corp and Nan Ya go up and down completely randomly.
Pair Corralation between Innolux Corp and Nan Ya
Assuming the 90 days trading horizon Innolux Corp is expected to generate 1.58 times more return on investment than Nan Ya. However, Innolux Corp is 1.58 times more volatile than Nan Ya Plastics. It trades about 0.02 of its potential returns per unit of risk. Nan Ya Plastics is currently generating about -0.13 per unit of risk. If you would invest 1,419 in Innolux Corp on September 3, 2024 and sell it today you would earn a total of 96.00 from holding Innolux Corp or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Innolux Corp vs. Nan Ya Plastics
Performance |
| Timeline |
| Innolux Corp |
| Nan Ya Plastics |
Innolux Corp and Nan Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Nan Ya
The main advantage of trading using opposite Innolux Corp and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Nan Ya 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 Nan Ya will offset losses from the drop in Nan Ya's long position.| Innolux Corp vs. AU Optronics | Innolux Corp vs. China Steel Corp | Innolux Corp vs. Hon Hai Precision | Innolux Corp vs. Delta Electronics |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |