Correlation Between Innelec Multimedia and Acticor Biotech
Can any of the company-specific risk be diversified away by investing in both Innelec Multimedia and Acticor Biotech 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 Innelec Multimedia and Acticor Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innelec Multimedia and Acticor Biotech SAS, you can compare the effects of market volatilities on Innelec Multimedia and Acticor Biotech 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 Innelec Multimedia with a short position of Acticor Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innelec Multimedia and Acticor Biotech.
Diversification Opportunities for Innelec Multimedia and Acticor Biotech
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innelec and Acticor is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Innelec Multimedia and Acticor Biotech SAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acticor Biotech SAS and Innelec Multimedia 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 Innelec Multimedia are associated (or correlated) with Acticor Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acticor Biotech SAS has no effect on the direction of Innelec Multimedia i.e., Innelec Multimedia and Acticor Biotech go up and down completely randomly.
Pair Corralation between Innelec Multimedia and Acticor Biotech
Assuming the 90 days trading horizon Innelec Multimedia is expected to generate 0.14 times more return on investment than Acticor Biotech. However, Innelec Multimedia is 7.17 times less risky than Acticor Biotech. It trades about -0.38 of its potential returns per unit of risk. Acticor Biotech SAS is currently generating about -0.1 per unit of risk. If you would invest 311.00 in Innelec Multimedia on September 5, 2024 and sell it today you would lose (44.00) from holding Innelec Multimedia or give up 14.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Innelec Multimedia vs. Acticor Biotech SAS
Performance |
| Timeline |
| Innelec Multimedia |
| Acticor Biotech SAS |
Innelec Multimedia and Acticor Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Innelec Multimedia and Acticor Biotech
The main advantage of trading using opposite Innelec Multimedia and Acticor Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innelec Multimedia position performs unexpectedly, Acticor Biotech 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 Acticor Biotech will offset losses from the drop in Acticor Biotech's long position.| Innelec Multimedia vs. Lacroix Group SA | Innelec Multimedia vs. Damartex | Innelec Multimedia vs. BigBen Interactive | Innelec Multimedia vs. Clasquin |
| Acticor Biotech vs. Spineguard | Acticor Biotech vs. Vallourec | Acticor Biotech vs. Manitou BF SA | Acticor Biotech vs. Ossiam Minimum Variance |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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