Correlation Between Innolux Corp and Pan International
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Pan International 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 Innolux Corp and Pan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Pan International Industrial Corp, you can compare the effects of market volatilities on Innolux Corp and Pan International 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 Innolux Corp with a short position of Pan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Pan International.
Diversification Opportunities for Innolux Corp and Pan International
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Innolux and Pan is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Pan International Industrial C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan International and Innolux Corp 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 Innolux Corp are associated (or correlated) with Pan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan International has no effect on the direction of Innolux Corp i.e., Innolux Corp and Pan International go up and down completely randomly.
Pair Corralation between Innolux Corp and Pan International
Assuming the 90 days trading horizon Innolux Corp is expected to generate 2.58 times less return on investment than Pan International. But when comparing it to its historical volatility, Innolux Corp is 1.38 times less risky than Pan International. It trades about 0.22 of its potential returns per unit of risk. Pan International Industrial Corp is currently generating about 0.41 of returns per unit of risk over similar time horizon. If you would invest 3,940 in Pan International Industrial Corp on December 5, 2024 and sell it today you would earn a total of 840.00 from holding Pan International Industrial Corp or generate 21.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Innolux Corp vs. Pan International Industrial C
Performance |
Timeline |
Innolux Corp |
Pan International |
Innolux Corp and Pan International Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innolux Corp and Pan International
The main advantage of trading using opposite Innolux Corp and Pan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Pan International 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 Pan International will offset losses from the drop in Pan International's long position.Innolux Corp vs. AU Optronics | Innolux Corp vs. China Steel Corp | Innolux Corp vs. Hon Hai Precision | Innolux Corp vs. Delta Electronics |
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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.
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