Correlation Between Damartex and Innelec Multimedia

Can any of the company-specific risk be diversified away by investing in both Damartex and Innelec Multimedia 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 Damartex and Innelec Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Damartex and Innelec Multimedia, you can compare the effects of market volatilities on Damartex and Innelec Multimedia 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 Damartex with a short position of Innelec Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Damartex and Innelec Multimedia.

Diversification Opportunities for Damartex and Innelec Multimedia

-0.64

Correlation Coefficient

Damartex  Innelec Multimedia

Excellent diversification

The 3 months correlation between Damartex and Innelec is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Damartex and Innelec Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innelec Multimedia and Damartex 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 Damartex are associated (or correlated) with Innelec Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innelec Multimedia has no effect on the direction of Damartex i.e., Damartex and Innelec Multimedia go up and down completely randomly.

Pair Corralation between Damartex and Innelec Multimedia

Assuming the 90 days trading horizon Damartex is expected to under-perform the Innelec Multimedia. But the stock apears to be less risky and, when comparing its historical volatility, Damartex is 2.63 times less risky than Innelec Multimedia. The stock trades about -0.33 of its potential returns per unit of risk. The Innelec Multimedia is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  267.00  in Innelec Multimedia on December 1, 2024 and sell it today you would earn a total of  65.00  from holding Innelec Multimedia or generate 24.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Damartex  vs.  Innelec Multimedia

Damartex

Risk-Adjusted Performance

Very Weak

Over the last 90 days Damartex has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Innelec Multimedia

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Innelec Multimedia are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Innelec Multimedia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Damartex and Innelec Multimedia

The main advantage of trading using opposite Damartex and Innelec Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Damartex position performs unexpectedly, Innelec Multimedia 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 Innelec Multimedia will offset losses from the drop in Innelec Multimedia's long position.

The idea behind Damartex and Innelec Multimedia pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.