Correlation Between Innometry and Sangsin Energy

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

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

Diversification Opportunities for Innometry and Sangsin Energy

0.54

Correlation Coefficient

Innometry  Sangsin Energy

Very weak diversification

The 3 months correlation between Innometry and Sangsin is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Innometry Co and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display and Innometry 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 Innometry Co are associated (or correlated) with Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Innometry i.e., Innometry and Sangsin Energy go up and down completely randomly.

Pair Corralation between Innometry and Sangsin Energy

Assuming the 90 days trading horizon Innometry Co is expected to generate 1.0 times more return on investment than Sangsin Energy. However, Innometry is 1.0 times more volatile than Sangsin Energy Display. It trades about -0.03 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.06 per unit of risk. If you would invest  1,429,000  in Innometry Co on December 2, 2024 and sell it today you would lose (625,000) from holding Innometry Co or give up 43.74% of portfolio value over 90 days.

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

Innometry Co  vs.  Sangsin Energy Display

Innometry

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Innometry Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Innometry is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Sangsin Energy Display

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sangsin Energy Display are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sangsin Energy sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Innometry and Sangsin Energy

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

The idea behind Innometry Co and Sangsin Energy Display 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..