Correlation Between Inoue Rubber and IT City
Can any of the company-specific risk be diversified away by investing in both Inoue Rubber and IT City 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 IT City 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 IT City Public, you can compare the effects of market volatilities on Inoue Rubber and IT City 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 IT City. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inoue Rubber and IT City.
Diversification Opportunities for Inoue Rubber and IT City
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Inoue and IT City is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Inoue Rubber Public and IT City Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IT City 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 IT City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IT City Public has no effect on the direction of Inoue Rubber i.e., Inoue Rubber and IT City go up and down completely randomly.
Pair Corralation between Inoue Rubber and IT City
Assuming the 90 days trading horizon Inoue Rubber Public is expected to generate 0.16 times more return on investment than IT City. However, Inoue Rubber Public is 6.08 times less risky than IT City. It trades about 0.18 of its potential returns per unit of risk. IT City Public is currently generating about -0.21 per unit of risk. If you would invest 1,400 in Inoue Rubber Public on October 25, 2024 and sell it today you would earn a total of 20.00 from holding Inoue Rubber Public or generate 1.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Inoue Rubber Public vs. IT City Public
Performance |
| Timeline |
| Inoue Rubber Public |
| IT City Public |
Inoue Rubber and IT City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Inoue Rubber and IT City
The main advantage of trading using opposite Inoue Rubber and IT City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inoue Rubber position performs unexpectedly, IT City 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 IT City will offset losses from the drop in IT City's long position.| Inoue Rubber vs. Hwa Fong Rubber | Inoue Rubber vs. AAPICO Hitech Public | Inoue Rubber vs. Haad Thip Public | Inoue Rubber vs. Goodyear Public |
| IT City vs. Internet Thailand Public | IT City vs. Jasmine International Public | IT City vs. Hana Microelectronics Public | IT City vs. Italian Thai Development Public |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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