Correlation Between Inoue Rubber and Ichitan Group
Can any of the company-specific risk be diversified away by investing in both Inoue Rubber and Ichitan Group 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 Inoue Rubber and Ichitan Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inoue Rubber Public and Ichitan Group Public, you can compare the effects of market volatilities on Inoue Rubber and Ichitan Group 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 Inoue Rubber with a short position of Ichitan Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inoue Rubber and Ichitan Group.
Diversification Opportunities for Inoue Rubber and Ichitan Group
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Inoue and Ichitan is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Inoue Rubber Public and Ichitan Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichitan Group Public and Inoue Rubber 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 Inoue Rubber Public are associated (or correlated) with Ichitan Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichitan Group Public has no effect on the direction of Inoue Rubber i.e., Inoue Rubber and Ichitan Group go up and down completely randomly.
Pair Corralation between Inoue Rubber and Ichitan Group
Assuming the 90 days trading horizon Inoue Rubber Public is expected to generate 0.42 times more return on investment than Ichitan Group. However, Inoue Rubber Public is 2.4 times less risky than Ichitan Group. It trades about 0.0 of its potential returns per unit of risk. Ichitan Group Public is currently generating about -0.05 per unit of risk. If you would invest 1,410 in Inoue Rubber Public on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Inoue Rubber Public or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inoue Rubber Public vs. Ichitan Group Public
Performance |
| Timeline |
| Inoue Rubber Public |
| Ichitan Group Public |
Inoue Rubber and Ichitan Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inoue Rubber and Ichitan Group
The main advantage of trading using opposite Inoue Rubber and Ichitan Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inoue Rubber position performs unexpectedly, Ichitan Group 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 Ichitan Group will offset losses from the drop in Ichitan Group's long position.| Inoue Rubber vs. TRC Construction Public | Inoue Rubber vs. Bangkok Expressway and | Inoue Rubber vs. Lohakit Metal Public | Inoue Rubber vs. Gunkul Engineering Public |
| Ichitan Group vs. Carabao Group Public | Ichitan Group vs. Taokaenoi Food Marketing | Ichitan Group vs. Home Product Center | Ichitan Group vs. Thai Union Group |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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