Correlation Between Innolux Corp and Primax Electronics
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Primax Electronics 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 Primax Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Primax Electronics, you can compare the effects of market volatilities on Innolux Corp and Primax Electronics 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 Primax Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Primax Electronics.
Diversification Opportunities for Innolux Corp and Primax Electronics
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Innolux and Primax is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Primax Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primax Electronics 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 Primax Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primax Electronics has no effect on the direction of Innolux Corp i.e., Innolux Corp and Primax Electronics go up and down completely randomly.
Pair Corralation between Innolux Corp and Primax Electronics
Assuming the 90 days trading horizon Innolux Corp is expected to generate 0.67 times more return on investment than Primax Electronics. However, Innolux Corp is 1.5 times less risky than Primax Electronics. It trades about 0.0 of its potential returns per unit of risk. Primax Electronics is currently generating about -0.05 per unit of risk. If you would invest 1,550 in Innolux Corp on September 14, 2024 and sell it today you would lose (15.00) from holding Innolux Corp or give up 0.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Innolux Corp vs. Primax Electronics
Performance |
Timeline |
Innolux Corp |
Primax Electronics |
Innolux Corp and Primax Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innolux Corp and Primax Electronics
The main advantage of trading using opposite Innolux Corp and Primax Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Primax Electronics 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 Primax Electronics will offset losses from the drop in Primax Electronics' 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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