Correlation Between Innolux Corp and United Renewable
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and United Renewable 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 United Renewable into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and United Renewable Energy, you can compare the effects of market volatilities on Innolux Corp and United Renewable 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 United Renewable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and United Renewable.
Diversification Opportunities for Innolux Corp and United Renewable
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Innolux and United is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and United Renewable Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Renewable Energy 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 United Renewable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Renewable Energy has no effect on the direction of Innolux Corp i.e., Innolux Corp and United Renewable go up and down completely randomly.
Pair Corralation between Innolux Corp and United Renewable
Assuming the 90 days trading horizon Innolux Corp is expected to generate 1.18 times more return on investment than United Renewable. However, Innolux Corp is 1.18 times more volatile than United Renewable Energy. It trades about 0.03 of its potential returns per unit of risk. United Renewable Energy is currently generating about -0.07 per unit of risk. If you would invest 1,216 in Innolux Corp on August 26, 2024 and sell it today you would earn a total of 334.00 from holding Innolux Corp or generate 27.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Innolux Corp vs. United Renewable Energy
Performance |
| Timeline |
| Innolux Corp |
| United Renewable Energy |
Innolux Corp and United Renewable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and United Renewable
The main advantage of trading using opposite Innolux Corp and United Renewable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, United Renewable 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 United Renewable will offset losses from the drop in United Renewable's long position.| Innolux Corp vs. Novatek Microelectronics Corp | Innolux Corp vs. Quanta Computer | Innolux Corp vs. United Microelectronics |
| United Renewable vs. Novatek Microelectronics Corp | United Renewable vs. Quanta Computer | United Renewable vs. United Microelectronics |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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