Correlation Between INNOX Advanced and KMH Hitech

Can any of the company-specific risk be diversified away by investing in both INNOX Advanced and KMH Hitech 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 INNOX Advanced and KMH Hitech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INNOX Advanced Materials and KMH Hitech Co, you can compare the effects of market volatilities on INNOX Advanced and KMH Hitech 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 INNOX Advanced with a short position of KMH Hitech. Check out your portfolio center. Please also check ongoing floating volatility patterns of INNOX Advanced and KMH Hitech.

Diversification Opportunities for INNOX Advanced and KMH Hitech

0.0

Correlation Coefficient

INNOX Advanced  KMH Hitech

Pay attention - limited upside

The 3 months correlation between INNOX and KMH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INNOX Advanced Materials and KMH Hitech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KMH Hitech and INNOX Advanced 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 INNOX Advanced Materials are associated (or correlated) with KMH Hitech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KMH Hitech has no effect on the direction of INNOX Advanced i.e., INNOX Advanced and KMH Hitech go up and down completely randomly.

Pair Corralation between INNOX Advanced and KMH Hitech

If you would invest  0.00  in INNOX Advanced Materials on October 10, 2024 and sell it today you would earn a total of  0.00  from holding INNOX Advanced Materials or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.61%
Values	Daily Returns

INNOX Advanced Materials  vs.  KMH Hitech Co

INNOX Advanced Materials

Risk-Adjusted Performance

0 of 100

Very Weak

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

KMH Hitech

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with INNOX Advanced and KMH Hitech

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

The idea behind INNOX Advanced Materials and KMH Hitech 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.