Correlation Between Innolux Corp and Acbel Polytech
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Acbel Polytech 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 Acbel Polytech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Acbel Polytech, you can compare the effects of market volatilities on Innolux Corp and Acbel Polytech 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 Acbel Polytech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Acbel Polytech.
Diversification Opportunities for Innolux Corp and Acbel Polytech
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innolux and Acbel is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Acbel Polytech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acbel Polytech 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 Acbel Polytech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acbel Polytech has no effect on the direction of Innolux Corp i.e., Innolux Corp and Acbel Polytech go up and down completely randomly.
Pair Corralation between Innolux Corp and Acbel Polytech
Assuming the 90 days trading horizon Innolux Corp is expected to generate 1.16 times more return on investment than Acbel Polytech. However, Innolux Corp is 1.16 times more volatile than Acbel Polytech. It trades about 0.04 of its potential returns per unit of risk. Acbel Polytech is currently generating about -0.02 per unit of risk. If you would invest 1,395 in Innolux Corp on August 29, 2024 and sell it today you would earn a total of 115.00 from holding Innolux Corp or generate 8.24% 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. Acbel Polytech
Performance |
| Timeline |
| Innolux Corp |
| Acbel Polytech |
Innolux Corp and Acbel Polytech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Acbel Polytech
The main advantage of trading using opposite Innolux Corp and Acbel Polytech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Acbel Polytech 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 Acbel Polytech will offset losses from the drop in Acbel Polytech's long position.| Innolux Corp vs. Sitronix Technology Corp | Innolux Corp vs. Elan Microelectronics Corp | Innolux Corp vs. Global Unichip Corp | Innolux Corp vs. Holtek Semiconductor |
| Acbel Polytech vs. Yulon Motor Co | Acbel Polytech vs. Far Eastern Department | Acbel Polytech vs. China Steel Corp | Acbel Polytech vs. Chang Hwa Commercial |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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