Correlation Between Inzi Display and Sewoon Medical

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Can any of the company-specific risk be diversified away by investing in both Inzi Display and Sewoon Medical 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 Inzi Display and Sewoon Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inzi Display CoLtd and Sewoon Medical Co, you can compare the effects of market volatilities on Inzi Display and Sewoon Medical 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 Inzi Display with a short position of Sewoon Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inzi Display and Sewoon Medical.

Diversification Opportunities for Inzi Display and Sewoon Medical

0.92
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Inzi and Sewoon is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Inzi Display CoLtd and Sewoon Medical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sewoon Medical and Inzi Display 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 Inzi Display CoLtd are associated (or correlated) with Sewoon Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sewoon Medical has no effect on the direction of Inzi Display i.e., Inzi Display and Sewoon Medical go up and down completely randomly.

Pair Corralation between Inzi Display and Sewoon Medical

Assuming the 90 days trading horizon Inzi Display is expected to generate 2.22 times less return on investment than Sewoon Medical. But when comparing it to its historical volatility, Inzi Display CoLtd is 1.4 times less risky than Sewoon Medical. It trades about 0.06 of its potential returns per unit of risk. Sewoon Medical Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  239,570  in Sewoon Medical Co on October 6, 2024 and sell it today you would earn a total of  9,430  from holding Sewoon Medical Co or generate 3.94% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Inzi Display CoLtd  vs.  Sewoon Medical Co

 Performance 
       Timeline  
Inzi Display CoLtd 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Inzi Display CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Sewoon Medical 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sewoon Medical Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Inzi Display and Sewoon Medical Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Inzi Display and Sewoon Medical

The main advantage of trading using opposite Inzi Display and Sewoon Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inzi Display position performs unexpectedly, Sewoon Medical 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 Sewoon Medical will offset losses from the drop in Sewoon Medical's long position.
The idea behind Inzi Display CoLtd and Sewoon Medical Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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