Correlation Between INtRON Biotechnology and Choil Aluminum

Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology and Choil Aluminum 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 INtRON Biotechnology and Choil Aluminum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between iNtRON Biotechnology and Choil Aluminum, you can compare the effects of market volatilities on INtRON Biotechnology and Choil Aluminum 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 INtRON Biotechnology with a short position of Choil Aluminum. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and Choil Aluminum.

Diversification Opportunities for INtRON Biotechnology and Choil Aluminum

-0.74

Correlation Coefficient

INtRON Biotechnology  Choil Aluminum

Pay attention - limited upside

The 3 months correlation between INtRON and Choil is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and Choil Aluminum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Choil Aluminum and INtRON Biotechnology 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 iNtRON Biotechnology are associated (or correlated) with Choil Aluminum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Choil Aluminum has no effect on the direction of INtRON Biotechnology i.e., INtRON Biotechnology and Choil Aluminum go up and down completely randomly.

Pair Corralation between INtRON Biotechnology and Choil Aluminum

Assuming the 90 days trading horizon iNtRON Biotechnology is expected to under-perform the Choil Aluminum. In addition to that, INtRON Biotechnology is 1.52 times more volatile than Choil Aluminum. It trades about -0.23 of its total potential returns per unit of risk. Choil Aluminum is currently generating about 0.13 per unit of volatility. If you would invest  143,000  in Choil Aluminum on December 24, 2024 and sell it today you would earn a total of  18,000  from holding Choil Aluminum or generate 12.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

iNtRON Biotechnology  vs.  Choil Aluminum

iNtRON Biotechnology

Risk-Adjusted Performance

Very Weak

Over the last 90 days iNtRON Biotechnology 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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Choil Aluminum

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Choil Aluminum are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Choil Aluminum sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with INtRON Biotechnology and Choil Aluminum

The main advantage of trading using opposite INtRON Biotechnology and Choil Aluminum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology position performs unexpectedly, Choil Aluminum 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 Choil Aluminum will offset losses from the drop in Choil Aluminum's long position.

The idea behind iNtRON Biotechnology and Choil Aluminum 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.