Correlation Between MS Autotech and Insung Information

Can any of the company-specific risk be diversified away by investing in both MS Autotech and Insung Information 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 MS Autotech and Insung Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between MS Autotech CoLtd and Insung Information Co, you can compare the effects of market volatilities on MS Autotech and Insung Information 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 MS Autotech with a short position of Insung Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of MS Autotech and Insung Information.

Diversification Opportunities for MS Autotech and Insung Information

0.42

Correlation Coefficient

MS Autotech  Insung Information

Very weak diversification

The 3 months correlation between 123040 and Insung is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MS Autotech CoLtd and Insung Information Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Insung Information and MS Autotech 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 MS Autotech CoLtd are associated (or correlated) with Insung Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Insung Information has no effect on the direction of MS Autotech i.e., MS Autotech and Insung Information go up and down completely randomly.

Pair Corralation between MS Autotech and Insung Information

Assuming the 90 days trading horizon MS Autotech CoLtd is expected to under-perform the Insung Information. But the stock apears to be less risky and, when comparing its historical volatility, MS Autotech CoLtd is 2.07 times less risky than Insung Information. The stock trades about -0.05 of its potential returns per unit of risk. The Insung Information Co is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  213,642  in Insung Information Co on December 2, 2024 and sell it today you would lose (31,242) from holding Insung Information Co or give up 14.62% of portfolio value over 90 days.

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

MS Autotech CoLtd  vs.  Insung Information Co

MS Autotech CoLtd

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MS Autotech CoLtd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, MS Autotech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Insung Information

Risk-Adjusted Performance

Very Weak

Over the last 90 days Insung Information Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Insung Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with MS Autotech and Insung Information

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

The idea behind MS Autotech CoLtd and Insung Information 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.