Correlation Between Ingentec and Bright Led
Can any of the company-specific risk be diversified away by investing in both Ingentec and Bright Led 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 Bright Led into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingentec and Bright Led Electronics, you can compare the effects of market volatilities on Ingentec and Bright Led 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 Bright Led. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Bright Led.
Diversification Opportunities for Ingentec and Bright Led
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ingentec and Bright is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Bright Led Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Led Electronics 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 Bright Led. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Led Electronics has no effect on the direction of Ingentec i.e., Ingentec and Bright Led go up and down completely randomly.
Pair Corralation between Ingentec and Bright Led
Assuming the 90 days trading horizon Ingentec is expected to generate 1.38 times more return on investment than Bright Led. However, Ingentec is 1.38 times more volatile than Bright Led Electronics. It trades about 0.04 of its potential returns per unit of risk. Bright Led Electronics is currently generating about 0.04 per unit of risk. If you would invest 13,056 in Ingentec on September 24, 2024 and sell it today you would earn a total of 4,444 from holding Ingentec or generate 34.04% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Ingentec vs. Bright Led Electronics
Performance |
Timeline |
Ingentec |
Bright Led Electronics |
Ingentec and Bright Led Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ingentec and Bright Led
The main advantage of trading using opposite Ingentec and Bright Led positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingentec position performs unexpectedly, Bright Led 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 Bright Led will offset losses from the drop in Bright Led's long position.Ingentec vs. Taita Chemical Co | Ingentec vs. Shih Kuen Plastics | Ingentec vs. Hsinli Chemical Industrial | Ingentec vs. Grand Pacific Petrochemical |
Bright Led vs. Century Wind Power | Bright Led vs. Green World Fintech | Bright Led vs. Ingentec | Bright Led vs. Chaheng Precision Co |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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