Correlation Between Iat Automobile and Ingenic Semiconductor

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Can any of the company-specific risk be diversified away by investing in both Iat Automobile and Ingenic Semiconductor 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 Iat Automobile and Ingenic Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iat Automobile Technology and Ingenic Semiconductor, you can compare the effects of market volatilities on Iat Automobile and Ingenic Semiconductor 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 Iat Automobile with a short position of Ingenic Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iat Automobile and Ingenic Semiconductor.

Diversification Opportunities for Iat Automobile and Ingenic Semiconductor

0.52
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Iat and Ingenic is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Iat Automobile Technology and Ingenic Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingenic Semiconductor and Iat Automobile 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 Iat Automobile Technology are associated (or correlated) with Ingenic Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingenic Semiconductor has no effect on the direction of Iat Automobile i.e., Iat Automobile and Ingenic Semiconductor go up and down completely randomly.

Pair Corralation between Iat Automobile and Ingenic Semiconductor

Assuming the 90 days trading horizon Iat Automobile Technology is expected to under-perform the Ingenic Semiconductor. In addition to that, Iat Automobile is 1.07 times more volatile than Ingenic Semiconductor. It trades about -0.17 of its total potential returns per unit of risk. Ingenic Semiconductor is currently generating about -0.01 per unit of volatility. If you would invest  6,931  in Ingenic Semiconductor on October 3, 2024 and sell it today you would lose (111.00) from holding Ingenic Semiconductor or give up 1.6% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Iat Automobile Technology  vs.  Ingenic Semiconductor

 Performance 
       Timeline  
Iat Automobile Technology 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ingenic Semiconductor has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Iat Automobile and Ingenic Semiconductor Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Iat Automobile and Ingenic Semiconductor

The main advantage of trading using opposite Iat Automobile and Ingenic Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iat Automobile position performs unexpectedly, Ingenic Semiconductor 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 Ingenic Semiconductor will offset losses from the drop in Ingenic Semiconductor's long position.
The idea behind Iat Automobile Technology and Ingenic Semiconductor 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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