Correlation Between E Ink and Innolux Corp
Can any of the company-specific risk be diversified away by investing in both E Ink 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 E Ink and Innolux Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Ink Holdings and Innolux Corp, you can compare the effects of market volatilities on E Ink 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 E Ink with a short position of Innolux Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Ink and Innolux Corp.
Diversification Opportunities for E Ink and Innolux Corp
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between 8069 and Innolux is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding E Ink Holdings and Innolux Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innolux Corp and E Ink 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 E Ink Holdings 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 E Ink i.e., E Ink and Innolux Corp go up and down completely randomly.
Pair Corralation between E Ink and Innolux Corp
Assuming the 90 days trading horizon E Ink Holdings is expected to under-perform the Innolux Corp. In addition to that, E Ink is 1.76 times more volatile than Innolux Corp. It trades about -0.04 of its total potential returns per unit of risk. Innolux Corp is currently generating about 0.37 per unit of volatility. If you would invest 1,360 in Innolux Corp on November 27, 2024 and sell it today you would earn a total of 145.00 from holding Innolux Corp or generate 10.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Ink Holdings vs. Innolux Corp
Performance |
| Timeline |
| E Ink Holdings |
| Innolux Corp |
E Ink and Innolux Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Ink and Innolux Corp
The main advantage of trading using opposite E Ink and Innolux Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Ink 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.| E Ink vs. Unimicron Technology Corp | E Ink vs. Innolux Corp | E Ink vs. Delta Electronics | E Ink vs. Novatek Microelectronics Corp |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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