Correlation Between Innolux Corp and Lelon Electronics
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Lelon Electronics 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 Lelon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Lelon Electronics Corp, you can compare the effects of market volatilities on Innolux Corp and Lelon Electronics 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 Lelon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Lelon Electronics.
Diversification Opportunities for Innolux Corp and Lelon Electronics
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Innolux and Lelon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Lelon Electronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lelon Electronics 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 Lelon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lelon Electronics Corp has no effect on the direction of Innolux Corp i.e., Innolux Corp and Lelon Electronics go up and down completely randomly.
Pair Corralation between Innolux Corp and Lelon Electronics
Assuming the 90 days trading horizon Innolux Corp is expected to generate 12.74 times less return on investment than Lelon Electronics. But when comparing it to its historical volatility, Innolux Corp is 1.98 times less risky than Lelon Electronics. It trades about 0.04 of its potential returns per unit of risk. Lelon Electronics Corp is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 7,390 in Lelon Electronics Corp on September 13, 2024 and sell it today you would earn a total of 1,130 from holding Lelon Electronics Corp or generate 15.29% 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. Lelon Electronics Corp
Performance |
| Timeline |
| Innolux Corp |
| Lelon Electronics Corp |
Innolux Corp and Lelon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Lelon Electronics
The main advantage of trading using opposite Innolux Corp and Lelon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Lelon Electronics 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 Lelon Electronics will offset losses from the drop in Lelon Electronics' long position.| Innolux Corp vs. AU Optronics | Innolux Corp vs. Ruentex Development Co | Innolux Corp vs. WiseChip Semiconductor | Innolux Corp vs. Novatek Microelectronics Corp |
| Lelon Electronics vs. AU Optronics | Lelon Electronics vs. Innolux Corp | Lelon Electronics vs. Ruentex Development Co | Lelon Electronics 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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