Correlation Between Innelec Multimedia and Bilendi

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

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

Diversification Opportunities for Innelec Multimedia and Bilendi

0.61

Correlation Coefficient

Innelec Multimedia  Bilendi

Poor diversification

The 3 months correlation between Innelec and Bilendi is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Innelec Multimedia and Bilendi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilendi and Innelec Multimedia 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 Innelec Multimedia are associated (or correlated) with Bilendi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilendi has no effect on the direction of Innelec Multimedia i.e., Innelec Multimedia and Bilendi go up and down completely randomly.

Pair Corralation between Innelec Multimedia and Bilendi

Assuming the 90 days trading horizon Innelec Multimedia is expected to generate 1.58 times more return on investment than Bilendi. However, Innelec Multimedia is 1.58 times more volatile than Bilendi. It trades about 0.0 of its potential returns per unit of risk. Bilendi is currently generating about -0.01 per unit of risk. If you would invest  507.00  in Innelec Multimedia on October 9, 2024 and sell it today you would lose (144.00) from holding Innelec Multimedia or give up 28.4% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Innelec Multimedia  vs.  Bilendi

Innelec Multimedia

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Innelec Multimedia are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Innelec Multimedia may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Bilendi

Risk-Adjusted Performance

9 of 100

OK

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

Pair Trading with Innelec Multimedia and Bilendi

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

The idea behind Innelec Multimedia and Bilendi 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.