Correlation Between Innolux Corp and Sunplus Technology
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Sunplus Technology 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 Sunplus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Sunplus Technology Co, you can compare the effects of market volatilities on Innolux Corp and Sunplus Technology 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 Sunplus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Sunplus Technology.
Diversification Opportunities for Innolux Corp and Sunplus Technology
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Innolux and Sunplus is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Sunplus Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunplus Technology 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 Sunplus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunplus Technology has no effect on the direction of Innolux Corp i.e., Innolux Corp and Sunplus Technology go up and down completely randomly.
Pair Corralation between Innolux Corp and Sunplus Technology
Assuming the 90 days trading horizon Innolux Corp is expected to generate 0.96 times more return on investment than Sunplus Technology. However, Innolux Corp is 1.04 times less risky than Sunplus Technology. It trades about 0.01 of its potential returns per unit of risk. Sunplus Technology Co is currently generating about 0.01 per unit of risk. If you would invest 1,511 in Innolux Corp on September 12, 2024 and sell it today you would earn a total of 39.00 from holding Innolux Corp or generate 2.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innolux Corp vs. Sunplus Technology Co
Performance |
| Timeline |
| Innolux Corp |
| Sunplus Technology |
Innolux Corp and Sunplus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Sunplus Technology
The main advantage of trading using opposite Innolux Corp and Sunplus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Sunplus Technology 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 Sunplus Technology will offset losses from the drop in Sunplus Technology'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 |
| Sunplus Technology vs. AU Optronics | Sunplus Technology vs. Innolux Corp | Sunplus Technology vs. Ruentex Development Co | Sunplus Technology vs. WiseChip Semiconductor |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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