Correlation Between TOPMATERIAL and INNOX Advanced
Can any of the company-specific risk be diversified away by investing in both TOPMATERIAL and INNOX Advanced 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 TOPMATERIAL and INNOX Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TOPMATERIAL LTD and INNOX Advanced Materials, you can compare the effects of market volatilities on TOPMATERIAL and INNOX Advanced 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 TOPMATERIAL with a short position of INNOX Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of TOPMATERIAL and INNOX Advanced.
Diversification Opportunities for TOPMATERIAL and INNOX Advanced
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between TOPMATERIAL and INNOX is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding TOPMATERIAL LTD and INNOX Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INNOX Advanced Materials and TOPMATERIAL 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 TOPMATERIAL LTD are associated (or correlated) with INNOX Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INNOX Advanced Materials has no effect on the direction of TOPMATERIAL i.e., TOPMATERIAL and INNOX Advanced go up and down completely randomly.
Pair Corralation between TOPMATERIAL and INNOX Advanced
Assuming the 90 days trading horizon TOPMATERIAL LTD is expected to under-perform the INNOX Advanced. In addition to that, TOPMATERIAL is 1.47 times more volatile than INNOX Advanced Materials. It trades about -0.25 of its total potential returns per unit of risk. INNOX Advanced Materials is currently generating about -0.26 per unit of volatility. If you would invest 2,465,000 in INNOX Advanced Materials on September 1, 2024 and sell it today you would lose (320,000) from holding INNOX Advanced Materials or give up 12.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TOPMATERIAL LTD vs. INNOX Advanced Materials
Performance |
| Timeline |
| TOPMATERIAL LTD |
| INNOX Advanced Materials |
TOPMATERIAL and INNOX Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TOPMATERIAL and INNOX Advanced
The main advantage of trading using opposite TOPMATERIAL and INNOX Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TOPMATERIAL position performs unexpectedly, INNOX Advanced 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 INNOX Advanced will offset losses from the drop in INNOX Advanced's long position.| TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. Samsung Electronics Co | TOPMATERIAL vs. LG Energy Solution | TOPMATERIAL vs. SK Hynix |
| INNOX Advanced vs. SK Hynix | INNOX Advanced vs. LX Semicon Co | INNOX Advanced vs. Tokai Carbon Korea | INNOX Advanced vs. People 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |