Correlation Between VGI Public and Inoue Rubber
Can any of the company-specific risk be diversified away by investing in both VGI Public and Inoue Rubber 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 VGI Public and Inoue Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VGI Public and Inoue Rubber Public, you can compare the effects of market volatilities on VGI Public and Inoue Rubber 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 VGI Public with a short position of Inoue Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of VGI Public and Inoue Rubber.
Diversification Opportunities for VGI Public and Inoue Rubber
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VGI and Inoue is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding VGI Public and Inoue Rubber Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inoue Rubber Public and VGI Public 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 VGI Public are associated (or correlated) with Inoue Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inoue Rubber Public has no effect on the direction of VGI Public i.e., VGI Public and Inoue Rubber go up and down completely randomly.
Pair Corralation between VGI Public and Inoue Rubber
Assuming the 90 days trading horizon VGI Public is expected to under-perform the Inoue Rubber. In addition to that, VGI Public is 2.86 times more volatile than Inoue Rubber Public. It trades about -0.22 of its total potential returns per unit of risk. Inoue Rubber Public is currently generating about -0.05 per unit of volatility. If you would invest 1,410 in Inoue Rubber Public on August 27, 2024 and sell it today you would lose (10.00) from holding Inoue Rubber Public or give up 0.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VGI Public vs. Inoue Rubber Public
Performance |
| Timeline |
| VGI Public |
| Inoue Rubber Public |
VGI Public and Inoue Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VGI Public and Inoue Rubber
The main advantage of trading using opposite VGI Public and Inoue Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VGI Public position performs unexpectedly, Inoue Rubber 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 Inoue Rubber will offset losses from the drop in Inoue Rubber's long position.| VGI Public vs. Delta Electronics Public | VGI Public vs. Delta Electronics Public | VGI Public vs. Airports of Thailand | VGI Public vs. Airports of Thailand |
| Inoue Rubber vs. Hwa Fong Rubber | Inoue Rubber vs. AAPICO Hitech Public | Inoue Rubber vs. Haad Thip Public | Inoue Rubber vs. Goodyear 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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