Correlation Between Ennostar and Innolux Corp
Can any of the company-specific risk be diversified away by investing in both Ennostar and Innolux Corp 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 Ennostar and Innolux Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ennostar and Innolux Corp, you can compare the effects of market volatilities on Ennostar and Innolux Corp 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 Ennostar with a short position of Innolux Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ennostar and Innolux Corp.
Diversification Opportunities for Ennostar and Innolux Corp
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ennostar and Innolux is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Ennostar and Innolux Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innolux Corp and Ennostar 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 Ennostar are associated (or correlated) with Innolux Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innolux Corp has no effect on the direction of Ennostar i.e., Ennostar and Innolux Corp go up and down completely randomly.
Pair Corralation between Ennostar and Innolux Corp
Assuming the 90 days trading horizon Ennostar is expected to generate 2.52 times less return on investment than Innolux Corp. But when comparing it to its historical volatility, Ennostar is 1.28 times less risky than Innolux Corp. It trades about 0.01 of its potential returns per unit of risk. Innolux Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,430 in Innolux Corp on August 25, 2024 and sell it today you would earn a total of 120.00 from holding Innolux Corp or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ennostar vs. Innolux Corp
Performance |
| Timeline |
| Ennostar |
| Innolux Corp |
Ennostar and Innolux Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ennostar and Innolux Corp
The main advantage of trading using opposite Ennostar and Innolux Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ennostar position performs unexpectedly, Innolux Corp 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 Innolux Corp will offset losses from the drop in Innolux Corp's long position.| Ennostar vs. Innolux Corp | Ennostar vs. United Renewable Energy | Ennostar vs. Acbel Polytech | Ennostar vs. Gigastorage Corp |
| Innolux Corp vs. Novatek Microelectronics Corp | Innolux Corp vs. Quanta Computer | Innolux Corp vs. United Microelectronics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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