Correlation Between INPAQ Technology and Kaimei Electronic
Can any of the company-specific risk be diversified away by investing in both INPAQ Technology and Kaimei Electronic 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 INPAQ Technology and Kaimei Electronic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INPAQ Technology Co and Kaimei Electronic Corp, you can compare the effects of market volatilities on INPAQ Technology and Kaimei Electronic 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 INPAQ Technology with a short position of Kaimei Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of INPAQ Technology and Kaimei Electronic.
Diversification Opportunities for INPAQ Technology and Kaimei Electronic
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INPAQ and Kaimei is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding INPAQ Technology Co and Kaimei Electronic Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaimei Electronic Corp and INPAQ Technology 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 INPAQ Technology Co are associated (or correlated) with Kaimei Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaimei Electronic Corp has no effect on the direction of INPAQ Technology i.e., INPAQ Technology and Kaimei Electronic go up and down completely randomly.
Pair Corralation between INPAQ Technology and Kaimei Electronic
Assuming the 90 days trading horizon INPAQ Technology Co is expected to generate 1.16 times more return on investment than Kaimei Electronic. However, INPAQ Technology is 1.16 times more volatile than Kaimei Electronic Corp. It trades about 0.06 of its potential returns per unit of risk. Kaimei Electronic Corp is currently generating about 0.01 per unit of risk. If you would invest 4,763 in INPAQ Technology Co on August 30, 2024 and sell it today you would earn a total of 3,047 from holding INPAQ Technology Co or generate 63.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
INPAQ Technology Co vs. Kaimei Electronic Corp
Performance |
| Timeline |
| INPAQ Technology |
| Kaimei Electronic Corp |
INPAQ Technology and Kaimei Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INPAQ Technology and Kaimei Electronic
The main advantage of trading using opposite INPAQ Technology and Kaimei Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INPAQ Technology position performs unexpectedly, Kaimei Electronic 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 Kaimei Electronic will offset losses from the drop in Kaimei Electronic's long position.| INPAQ Technology vs. Prosperity Dielectrics Co | INPAQ Technology vs. Wafer Works | INPAQ Technology vs. Walsin Technology Corp | INPAQ Technology vs. Holtek Semiconductor |
| Kaimei Electronic vs. Yageo Corp | Kaimei Electronic vs. Taiwan Mask Corp | Kaimei Electronic vs. Macronix International Co | Kaimei Electronic vs. Gold Circuit Electronics |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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