Correlation Between Innolux Corp and Xintec
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Xintec 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 Xintec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Xintec, you can compare the effects of market volatilities on Innolux Corp and Xintec 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 Xintec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Xintec.
Diversification Opportunities for Innolux Corp and Xintec
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innolux and Xintec is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Xintec in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xintec 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 Xintec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xintec has no effect on the direction of Innolux Corp i.e., Innolux Corp and Xintec go up and down completely randomly.
Pair Corralation between Innolux Corp and Xintec
Assuming the 90 days trading horizon Innolux Corp is expected to generate 0.49 times more return on investment than Xintec. However, Innolux Corp is 2.02 times less risky than Xintec. It trades about -0.05 of its potential returns per unit of risk. Xintec is currently generating about -0.17 per unit of risk. If you would invest 1,585 in Innolux Corp on September 12, 2024 and sell it today you would lose (30.00) from holding Innolux Corp or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innolux Corp vs. Xintec
Performance |
| Timeline |
| Innolux Corp |
| Xintec |
Innolux Corp and Xintec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Xintec
The main advantage of trading using opposite Innolux Corp and Xintec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Xintec 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 Xintec will offset losses from the drop in Xintec'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 |
| Xintec vs. Wei Chih Steel | Xintec vs. Century Iron And | Xintec vs. Lian Hwa Foods | Xintec vs. Tang Eng Iron |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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