Correlation Between Inmax Holding and Dadi Early

Can any of the company-specific risk be diversified away by investing in both Inmax Holding and Dadi Early 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 Dadi Early 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 Dadi Early Childhood Education, you can compare the effects of market volatilities on Inmax Holding and Dadi Early 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 Dadi Early. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inmax Holding and Dadi Early.

Diversification Opportunities for Inmax Holding and Dadi Early

0.4

Correlation Coefficient

Inmax Holding  Dadi Early

Very weak diversification

The 3 months correlation between Inmax and Dadi is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Inmax Holding Co and Dadi Early Childhood Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dadi Early Childhood 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 Dadi Early. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dadi Early Childhood has no effect on the direction of Inmax Holding i.e., Inmax Holding and Dadi Early go up and down completely randomly.

Pair Corralation between Inmax Holding and Dadi Early

Assuming the 90 days trading horizon Inmax Holding Co is expected to under-perform the Dadi Early. But the stock apears to be less risky and, when comparing its historical volatility, Inmax Holding Co is 1.05 times less risky than Dadi Early. The stock trades about -0.02 of its potential returns per unit of risk. The Dadi Early Childhood Education is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  2,365  in Dadi Early Childhood Education on December 27, 2024 and sell it today you would earn a total of  505.00  from holding Dadi Early Childhood Education or generate 21.35% return on investment over 90 days.

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

Inmax Holding Co  vs.  Dadi Early Childhood Education

Inmax Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Inmax Holding Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Inmax Holding is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Dadi Early Childhood

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dadi Early Childhood Education are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Dadi Early showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Inmax Holding and Dadi Early

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

The idea behind Inmax Holding Co and Dadi Early Childhood Education 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.