Correlation Between Innolux Corp and Taiflex Scientific
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Taiflex Scientific 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 Taiflex Scientific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Taiflex Scientific Co, you can compare the effects of market volatilities on Innolux Corp and Taiflex Scientific 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 Taiflex Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Taiflex Scientific.
Diversification Opportunities for Innolux Corp and Taiflex Scientific
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innolux and Taiflex is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Taiflex Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiflex Scientific 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 Taiflex Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiflex Scientific has no effect on the direction of Innolux Corp i.e., Innolux Corp and Taiflex Scientific go up and down completely randomly.
Pair Corralation between Innolux Corp and Taiflex Scientific
Assuming the 90 days trading horizon Innolux Corp is expected to generate 1.0 times more return on investment than Taiflex Scientific. However, Innolux Corp is 1.0 times less risky than Taiflex Scientific. It trades about -0.05 of its potential returns per unit of risk. Taiflex Scientific Co is currently generating about -0.14 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. Taiflex Scientific Co
Performance |
| Timeline |
| Innolux Corp |
| Taiflex Scientific |
Innolux Corp and Taiflex Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innolux Corp and Taiflex Scientific
The main advantage of trading using opposite Innolux Corp and Taiflex Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Taiflex Scientific 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 Taiflex Scientific will offset losses from the drop in Taiflex Scientific'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 |
| Taiflex Scientific vs. Flexium Interconnect | Taiflex Scientific vs. Career Technology MFG | Taiflex Scientific vs. Powertech Technology | Taiflex Scientific vs. Elite Material Co |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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