Correlation Between Innolux Corp and Enlight Corp
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Enlight Corp 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 Enlight Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Enlight Corp, you can compare the effects of market volatilities on Innolux Corp and Enlight Corp 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 Enlight Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Enlight Corp.
Diversification Opportunities for Innolux Corp and Enlight Corp
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innolux and Enlight is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Enlight Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enlight Corp 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 Enlight Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enlight Corp has no effect on the direction of Innolux Corp i.e., Innolux Corp and Enlight Corp go up and down completely randomly.
Pair Corralation between Innolux Corp and Enlight Corp
Assuming the 90 days trading horizon Innolux Corp is expected to generate 2.98 times less return on investment than Enlight Corp. But when comparing it to its historical volatility, Innolux Corp is 1.41 times less risky than Enlight Corp. It trades about 0.04 of its potential returns per unit of risk. Enlight Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,375 in Enlight Corp on September 5, 2024 and sell it today you would earn a total of 2,530 from holding Enlight Corp or generate 184.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Innolux Corp vs. Enlight Corp
Performance |
| Timeline |
| Innolux Corp |
| Enlight Corp |
Innolux Corp and Enlight Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Enlight Corp
The main advantage of trading using opposite Innolux Corp and Enlight Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Enlight Corp 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 Enlight Corp will offset losses from the drop in Enlight Corp's long position.| Innolux Corp vs. Taiwan Semiconductor Manufacturing | Innolux Corp vs. Yang Ming Marine | Innolux Corp vs. AU Optronics | Innolux Corp vs. Nan Ya Plastics |
| Enlight Corp vs. Taiwan Semiconductor Manufacturing | Enlight Corp vs. Yang Ming Marine | Enlight Corp vs. AU Optronics | Enlight Corp vs. Nan Ya Plastics |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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