Correlation Between Innolux Corp and Kinko Optical
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Kinko Optical 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 Kinko Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Kinko Optical Co, you can compare the effects of market volatilities on Innolux Corp and Kinko Optical 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 Kinko Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Kinko Optical.
Diversification Opportunities for Innolux Corp and Kinko Optical
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innolux and Kinko is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Kinko Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinko Optical 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 Kinko Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinko Optical has no effect on the direction of Innolux Corp i.e., Innolux Corp and Kinko Optical go up and down completely randomly.
Pair Corralation between Innolux Corp and Kinko Optical
Assuming the 90 days trading horizon Innolux Corp is expected to generate 1.21 times more return on investment than Kinko Optical. However, Innolux Corp is 1.21 times more volatile than Kinko Optical Co. It trades about 0.04 of its potential returns per unit of risk. Kinko Optical Co is currently generating about 0.04 per unit of risk. If you would invest 1,540 in Innolux Corp on September 13, 2024 and sell it today you would earn a total of 15.00 from holding Innolux Corp or generate 0.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innolux Corp vs. Kinko Optical Co
Performance |
| Timeline |
| Innolux Corp |
| Kinko Optical |
Innolux Corp and Kinko Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Kinko Optical
The main advantage of trading using opposite Innolux Corp and Kinko Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Kinko Optical 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 Kinko Optical will offset losses from the drop in Kinko Optical'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 |
| Kinko Optical vs. AU Optronics | Kinko Optical vs. Innolux Corp | Kinko Optical vs. Ruentex Development Co | Kinko Optical 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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