Correlation Between Innolux Corp and Chin Poon
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Chin Poon 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 Chin Poon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Chin Poon Industrial Co, you can compare the effects of market volatilities on Innolux Corp and Chin Poon 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 Chin Poon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Chin Poon.
Diversification Opportunities for Innolux Corp and Chin Poon
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Innolux and Chin is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Chin Poon Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chin Poon Industrial 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 Chin Poon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chin Poon Industrial has no effect on the direction of Innolux Corp i.e., Innolux Corp and Chin Poon go up and down completely randomly.
Pair Corralation between Innolux Corp and Chin Poon
Assuming the 90 days trading horizon Innolux Corp is expected to generate 1.43 times more return on investment than Chin Poon. However, Innolux Corp is 1.43 times more volatile than Chin Poon Industrial Co. It trades about 0.08 of its potential returns per unit of risk. Chin Poon Industrial Co is currently generating about -0.03 per unit of risk. If you would invest 1,425 in Innolux Corp on September 12, 2024 and sell it today you would earn a total of 130.00 from holding Innolux Corp or generate 9.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innolux Corp vs. Chin Poon Industrial Co
Performance |
| Timeline |
| Innolux Corp |
| Chin Poon Industrial |
Innolux Corp and Chin Poon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Chin Poon
The main advantage of trading using opposite Innolux Corp and Chin Poon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Chin Poon 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 Chin Poon will offset losses from the drop in Chin Poon's long position.| Innolux Corp vs. AU Optronics | Innolux Corp vs. Ruentex Development Co | Innolux Corp vs. WiseChip Semiconductor | Innolux Corp vs. Novatek Microelectronics Corp |
| Chin Poon vs. Compeq Manufacturing Co | Chin Poon vs. Unitech Printed Circuit | Chin Poon vs. Gold Circuit Electronics | Chin Poon vs. WUS Printed Circuit |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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