Correlation Between Innolux Corp and Nan Ya
Can any of the company-specific risk be diversified away by investing in both Innolux Corp and Nan Ya 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 Nan Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Innolux Corp and Nan Ya Printed, you can compare the effects of market volatilities on Innolux Corp and Nan Ya 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 Nan Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Nan Ya.
Diversification Opportunities for Innolux Corp and Nan Ya
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Innolux and Nan is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Nan Ya Printed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nan Ya Printed 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 Nan Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nan Ya Printed has no effect on the direction of Innolux Corp i.e., Innolux Corp and Nan Ya go up and down completely randomly.
Pair Corralation between Innolux Corp and Nan Ya
Assuming the 90 days trading horizon Innolux Corp is expected to under-perform the Nan Ya. But the stock apears to be less risky and, when comparing its historical volatility, Innolux Corp is 1.73 times less risky than Nan Ya. The stock trades about -0.06 of its potential returns per unit of risk. The Nan Ya Printed is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11,700 in Nan Ya Printed on December 4, 2024 and sell it today you would earn a total of 1,300 from holding Nan Ya Printed or generate 11.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Innolux Corp vs. Nan Ya Printed
Performance |
Timeline |
Innolux Corp |
Nan Ya Printed |
Innolux Corp and Nan Ya Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Innolux Corp and Nan Ya
The main advantage of trading using opposite Innolux Corp and Nan Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Innolux Corp position performs unexpectedly, Nan Ya 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 Nan Ya will offset losses from the drop in Nan Ya'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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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