Correlation Between Coloray International and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Coloray International and Incar Financial 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 Coloray International and Incar Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coloray International Investment and Incar Financial Service, you can compare the effects of market volatilities on Coloray International and Incar Financial 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 Coloray International with a short position of Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coloray International and Incar Financial.
Diversification Opportunities for Coloray International and Incar Financial
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Coloray and Incar is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Coloray International Investme and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service and Coloray International 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 Coloray International Investment are associated (or correlated) with Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Coloray International i.e., Coloray International and Incar Financial go up and down completely randomly.
Pair Corralation between Coloray International and Incar Financial
Assuming the 90 days trading horizon Coloray International Investment is expected to generate 0.77 times more return on investment than Incar Financial. However, Coloray International Investment is 1.3 times less risky than Incar Financial. It trades about 0.63 of its potential returns per unit of risk. Incar Financial Service is currently generating about 0.07 per unit of risk. If you would invest 64,200 in Coloray International Investment on November 8, 2024 and sell it today you would earn a total of 18,600 from holding Coloray International Investment or generate 28.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coloray International Investme vs. Incar Financial Service
Performance |
| Timeline |
| Coloray International |
| Incar Financial Service |
Coloray International and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coloray International and Incar Financial
The main advantage of trading using opposite Coloray International and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloray International position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Coloray International vs. LG Chem | Coloray International vs. Chunbo Co | Coloray International vs. DukSan Neolux CoLtd | Coloray International vs. Hyosung Chemical Corp |
| Incar Financial vs. Lotte Non Life Insurance | Incar Financial vs. Hironic Co | Incar Financial vs. Samsung Life Insurance | Incar Financial vs. Daechang Steel Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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