Correlation Between Innowireless and DONGKUK COATED

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

By analyzing existing cross correlation between Innowireless Co and DONGKUK TED METAL, you can compare the effects of market volatilities on Innowireless and DONGKUK COATED 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 Innowireless with a short position of DONGKUK COATED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innowireless and DONGKUK COATED.

Diversification Opportunities for Innowireless and DONGKUK COATED

-0.69

Correlation Coefficient

Innowireless  DONGKUK COATED

Excellent diversification

The 3 months correlation between Innowireless and DONGKUK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Innowireless Co and DONGKUK TED METAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DONGKUK TED METAL and Innowireless 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 Innowireless Co are associated (or correlated) with DONGKUK COATED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DONGKUK TED METAL has no effect on the direction of Innowireless i.e., Innowireless and DONGKUK COATED go up and down completely randomly.

Pair Corralation between Innowireless and DONGKUK COATED

Assuming the 90 days trading horizon Innowireless Co is expected to generate 1.26 times more return on investment than DONGKUK COATED. However, Innowireless is 1.26 times more volatile than DONGKUK TED METAL. It trades about 0.19 of its potential returns per unit of risk. DONGKUK TED METAL is currently generating about -0.01 per unit of risk. If you would invest  1,890,000  in Innowireless Co on September 28, 2024 and sell it today you would earn a total of  210,000  from holding Innowireless Co or generate 11.11% return on investment over 90 days.

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

Innowireless Co  vs.  DONGKUK TED METAL

Innowireless

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innowireless Co are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Innowireless sustained solid returns over the last few months and may actually be approaching a breakup point.

DONGKUK TED METAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DONGKUK TED METAL has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Innowireless and DONGKUK COATED

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

The idea behind Innowireless Co and DONGKUK TED METAL 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.