Correlation Between Innolux Corp and Zhen Ding
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Zhen Ding 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 Zhen Ding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Zhen Ding Technology, you can compare the effects of market volatilities on Innolux Corp and Zhen Ding 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 Zhen Ding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Zhen Ding.
Diversification Opportunities for Innolux Corp and Zhen Ding
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innolux and Zhen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Zhen Ding Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhen Ding 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 Zhen Ding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhen Ding Technology has no effect on the direction of Innolux Corp i.e., Innolux Corp and Zhen Ding go up and down completely randomly.
Pair Corralation between Innolux Corp and Zhen Ding
Assuming the 90 days trading horizon Innolux Corp is expected to generate 1.24 times more return on investment than Zhen Ding. However, Innolux Corp is 1.24 times more volatile than Zhen Ding Technology. It trades about 0.05 of its potential returns per unit of risk. Zhen Ding Technology is currently generating about 0.02 per unit of risk. If you would invest 1,086 in Innolux Corp on September 14, 2024 and sell it today you would earn a total of 489.00 from holding Innolux Corp or generate 45.03% 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. Zhen Ding Technology
Performance |
| Timeline |
| Innolux Corp |
| Zhen Ding Technology |
Innolux Corp and Zhen Ding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Zhen Ding
The main advantage of trading using opposite Innolux Corp and Zhen Ding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Zhen Ding 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 Zhen Ding will offset losses from the drop in Zhen Ding's long position.| Innolux Corp vs. AU Optronics | Innolux Corp vs. China Steel Corp | Innolux Corp vs. Hon Hai Precision | Innolux Corp vs. Delta Electronics |
| Zhen Ding vs. AU Optronics | Zhen Ding vs. Innolux Corp | Zhen Ding vs. Ruentex Development Co | Zhen Ding 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |