Correlation Between Innolux Corp and Wafer Works
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Wafer Works 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 Wafer Works into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Wafer Works, you can compare the effects of market volatilities on Innolux Corp and Wafer Works 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 Wafer Works. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Wafer Works.
Diversification Opportunities for Innolux Corp and Wafer Works
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innolux and Wafer is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Wafer Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wafer Works 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 Wafer Works. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wafer Works has no effect on the direction of Innolux Corp i.e., Innolux Corp and Wafer Works go up and down completely randomly.
Pair Corralation between Innolux Corp and Wafer Works
Assuming the 90 days trading horizon Innolux Corp is expected to generate 0.93 times more return on investment than Wafer Works. However, Innolux Corp is 1.07 times less risky than Wafer Works. It trades about -0.05 of its potential returns per unit of risk. Wafer Works is currently generating about -0.31 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. Wafer Works
Performance |
| Timeline |
| Innolux Corp |
| Wafer Works |
Innolux Corp and Wafer Works Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Wafer Works
The main advantage of trading using opposite Innolux Corp and Wafer Works positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Wafer Works 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 Wafer Works will offset losses from the drop in Wafer Works' long position.| Innolux Corp vs. AU Optronics | Innolux Corp vs. Ruentex Development Co | Innolux Corp vs. WiseChip Semiconductor | Innolux Corp vs. Novatek Microelectronics Corp |
| Wafer Works vs. Sino American Silicon Products | Wafer Works vs. GlobalWafers Co | Wafer Works vs. Motech Industries Co | Wafer Works vs. Formosa Sumco Technology |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |