Correlation Between Inmax Holding and Forcecon Technology

Can any of the company-specific risk be diversified away by investing in both Inmax Holding and Forcecon Technology 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 Inmax Holding and Forcecon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Inmax Holding Co and Forcecon Technology Co, you can compare the effects of market volatilities on Inmax Holding and Forcecon Technology 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 Inmax Holding with a short position of Forcecon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inmax Holding and Forcecon Technology.

Diversification Opportunities for Inmax Holding and Forcecon Technology

-0.05

Correlation Coefficient

Inmax Holding  Forcecon Technology

Good diversification

The 3 months correlation between Inmax and Forcecon is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Inmax Holding Co and Forcecon Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forcecon Technology and Inmax Holding 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 Inmax Holding Co are associated (or correlated) with Forcecon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forcecon Technology has no effect on the direction of Inmax Holding i.e., Inmax Holding and Forcecon Technology go up and down completely randomly.

Pair Corralation between Inmax Holding and Forcecon Technology

Assuming the 90 days trading horizon Inmax Holding Co is expected to generate 1.45 times more return on investment than Forcecon Technology. However, Inmax Holding is 1.45 times more volatile than Forcecon Technology Co. It trades about -0.07 of its potential returns per unit of risk. Forcecon Technology Co is currently generating about -0.19 per unit of risk. If you would invest  5,570  in Inmax Holding Co on October 24, 2024 and sell it today you would lose (260.00) from holding Inmax Holding Co or give up 4.67% of portfolio value over 90 days.

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

Inmax Holding Co  vs.  Forcecon Technology Co

Inmax Holding

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Inmax Holding Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Inmax Holding showed solid returns over the last few months and may actually be approaching a breakup point.

Forcecon Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Forcecon Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Inmax Holding and Forcecon Technology

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

The idea behind Inmax Holding Co and Forcecon Technology 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.