Correlation Between Ingentec and Inventec Corp
Can any of the company-specific risk be diversified away by investing in both Ingentec and Inventec Corp 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 Ingentec and Inventec Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingentec and Inventec Corp, you can compare the effects of market volatilities on Ingentec and Inventec Corp 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 Ingentec with a short position of Inventec Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Inventec Corp.
Diversification Opportunities for Ingentec and Inventec Corp
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ingentec and Inventec is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Inventec Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inventec Corp and Ingentec 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 Ingentec are associated (or correlated) with Inventec Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inventec Corp has no effect on the direction of Ingentec i.e., Ingentec and Inventec Corp go up and down completely randomly.
Pair Corralation between Ingentec and Inventec Corp
Assuming the 90 days trading horizon Ingentec is expected to under-perform the Inventec Corp. In addition to that, Ingentec is 1.04 times more volatile than Inventec Corp. It trades about -0.12 of its total potential returns per unit of risk. Inventec Corp is currently generating about -0.01 per unit of volatility. If you would invest 4,940 in Inventec Corp on December 10, 2024 and sell it today you would lose (130.00) from holding Inventec Corp or give up 2.63% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Ingentec vs. Inventec Corp
Performance |
Timeline |
Ingentec |
Inventec Corp |
Ingentec and Inventec Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ingentec and Inventec Corp
The main advantage of trading using opposite Ingentec and Inventec Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingentec position performs unexpectedly, Inventec Corp 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 Inventec Corp will offset losses from the drop in Inventec Corp's long position.Ingentec vs. China General Plastics | Ingentec vs. Far EasTone Telecommunications | Ingentec vs. Taiwan Mobile Co | Ingentec vs. Arima Communications Corp |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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