Correlation Between Voltronic Power and Icares Medicus
Can any of the company-specific risk be diversified away by investing in both Voltronic Power and Icares Medicus 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 Voltronic Power and Icares Medicus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Voltronic Power Technology and Icares Medicus, you can compare the effects of market volatilities on Voltronic Power and Icares Medicus 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 Voltronic Power with a short position of Icares Medicus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Voltronic Power and Icares Medicus.
Diversification Opportunities for Voltronic Power and Icares Medicus
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Voltronic and Icares is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Voltronic Power Technology and Icares Medicus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icares Medicus and Voltronic Power 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 Voltronic Power Technology are associated (or correlated) with Icares Medicus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icares Medicus has no effect on the direction of Voltronic Power i.e., Voltronic Power and Icares Medicus go up and down completely randomly.
Pair Corralation between Voltronic Power and Icares Medicus
Assuming the 90 days trading horizon Voltronic Power Technology is expected to under-perform the Icares Medicus. In addition to that, Voltronic Power is 1.46 times more volatile than Icares Medicus. It trades about -0.04 of its total potential returns per unit of risk. Icares Medicus is currently generating about 0.02 per unit of volatility. If you would invest 12,100 in Icares Medicus on October 7, 2024 and sell it today you would earn a total of 50.00 from holding Icares Medicus or generate 0.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Voltronic Power Technology vs. Icares Medicus
Performance |
| Timeline |
| Voltronic Power Tech |
| Icares Medicus |
Voltronic Power and Icares Medicus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Voltronic Power and Icares Medicus
The main advantage of trading using opposite Voltronic Power and Icares Medicus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Voltronic Power position performs unexpectedly, Icares Medicus 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 Icares Medicus will offset losses from the drop in Icares Medicus' long position.| Voltronic Power vs. Walsin Lihwa Corp | Voltronic Power vs. Advanced Energy Solution | Voltronic Power vs. Simplo Technology Co | Voltronic Power vs. Ta Ya Electric |
| Icares Medicus vs. Maxigen Biotech | Icares Medicus vs. Chunghwa Chemical Synthesis | Icares Medicus vs. Sinphar Pharmaceutical Co | Icares Medicus vs. ScinoPharm Taiwan |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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