Correlation Between Innolux Corp and Promise Technology
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Promise 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 Promise 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 Promise Technology, you can compare the effects of market volatilities on Innolux Corp and Promise 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 Promise Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Promise Technology.
Diversification Opportunities for Innolux Corp and Promise Technology
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innolux and Promise is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Promise Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Promise 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 Promise Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Promise Technology has no effect on the direction of Innolux Corp i.e., Innolux Corp and Promise Technology go up and down completely randomly.
Pair Corralation between Innolux Corp and Promise Technology
Assuming the 90 days trading horizon Innolux Corp is expected to generate 0.9 times more return on investment than Promise Technology. However, Innolux Corp is 1.1 times less risky than Promise Technology. It trades about 0.05 of its potential returns per unit of risk. Promise Technology is currently generating about 0.03 per unit of risk. If you would invest 1,071 in Innolux Corp on September 12, 2024 and sell it today you would earn a total of 479.00 from holding Innolux Corp or generate 44.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Innolux Corp vs. Promise Technology
Performance |
| Timeline |
| Innolux Corp |
| Promise Technology |
Innolux Corp and Promise Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Promise Technology
The main advantage of trading using opposite Innolux Corp and Promise Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Promise 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 Promise Technology will offset losses from the drop in Promise 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 |
| Promise Technology vs. AU Optronics | Promise Technology vs. Innolux Corp | Promise Technology vs. Ruentex Development Co | Promise 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |