Correlation Between Innolux Corp and Wistron NeWeb
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Wistron NeWeb 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 Wistron NeWeb into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Wistron NeWeb Corp, you can compare the effects of market volatilities on Innolux Corp and Wistron NeWeb 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 Wistron NeWeb. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Wistron NeWeb.
Diversification Opportunities for Innolux Corp and Wistron NeWeb
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Innolux and Wistron is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Wistron NeWeb Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wistron NeWeb Corp 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 Wistron NeWeb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wistron NeWeb Corp has no effect on the direction of Innolux Corp i.e., Innolux Corp and Wistron NeWeb go up and down completely randomly.
Pair Corralation between Innolux Corp and Wistron NeWeb
Assuming the 90 days trading horizon Innolux Corp is expected to under-perform the Wistron NeWeb. But the stock apears to be less risky and, when comparing its historical volatility, Innolux Corp is 1.54 times less risky than Wistron NeWeb. The stock trades about -0.05 of its potential returns per unit of risk. The Wistron NeWeb Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 12,050 in Wistron NeWeb Corp on September 12, 2024 and sell it today you would lose (150.00) from holding Wistron NeWeb Corp or give up 1.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Innolux Corp vs. Wistron NeWeb Corp
Performance |
| Timeline |
| Innolux Corp |
| Wistron NeWeb Corp |
Innolux Corp and Wistron NeWeb Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Wistron NeWeb
The main advantage of trading using opposite Innolux Corp and Wistron NeWeb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Wistron NeWeb 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 Wistron NeWeb will offset losses from the drop in Wistron NeWeb'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 |
| Wistron NeWeb vs. AU Optronics | Wistron NeWeb vs. Innolux Corp | Wistron NeWeb vs. Ruentex Development Co | Wistron NeWeb 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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