Correlation Between Inrom Construction and Biomedix Incubator
Can any of the company-specific risk be diversified away by investing in both Inrom Construction and Biomedix Incubator 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 Inrom Construction and Biomedix Incubator into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inrom Construction Industries and Biomedix Incubator, you can compare the effects of market volatilities on Inrom Construction and Biomedix Incubator 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 Inrom Construction with a short position of Biomedix Incubator. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inrom Construction and Biomedix Incubator.
Diversification Opportunities for Inrom Construction and Biomedix Incubator
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Inrom and Biomedix is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Inrom Construction Industries and Biomedix Incubator in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biomedix Incubator and Inrom Construction 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 Inrom Construction Industries are associated (or correlated) with Biomedix Incubator. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biomedix Incubator has no effect on the direction of Inrom Construction i.e., Inrom Construction and Biomedix Incubator go up and down completely randomly.
Pair Corralation between Inrom Construction and Biomedix Incubator
Assuming the 90 days trading horizon Inrom Construction Industries is expected to generate 0.44 times more return on investment than Biomedix Incubator. However, Inrom Construction Industries is 2.28 times less risky than Biomedix Incubator. It trades about 0.44 of its potential returns per unit of risk. Biomedix Incubator is currently generating about -0.11 per unit of risk. If you would invest 130,269 in Inrom Construction Industries on August 29, 2024 and sell it today you would earn a total of 27,031 from holding Inrom Construction Industries or generate 20.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inrom Construction Industries vs. Biomedix Incubator
Performance |
| Timeline |
| Inrom Construction |
| Biomedix Incubator |
Inrom Construction and Biomedix Incubator Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inrom Construction and Biomedix Incubator
The main advantage of trading using opposite Inrom Construction and Biomedix Incubator positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inrom Construction position performs unexpectedly, Biomedix Incubator 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 Biomedix Incubator will offset losses from the drop in Biomedix Incubator's long position.| Inrom Construction vs. Ormat Technologies | Inrom Construction vs. Multi Retail Group | Inrom Construction vs. Nova | Inrom Construction vs. B Communications |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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