Correlation Between Innolux Corp and Tachan Securities

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

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

Diversification Opportunities for Innolux Corp and Tachan Securities

-0.76

Correlation Coefficient

Innolux Corp  Tachan Securities

Pay attention - limited upside

The 3 months correlation between Innolux and Tachan is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Tachan Securities Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tachan Securities and Innolux Corp 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 Innolux Corp are associated (or correlated) with Tachan Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tachan Securities has no effect on the direction of Innolux Corp i.e., Innolux Corp and Tachan Securities go up and down completely randomly.

Pair Corralation between Innolux Corp and Tachan Securities

Assuming the 90 days trading horizon Innolux Corp is expected to under-perform the Tachan Securities. In addition to that, Innolux Corp is 2.34 times more volatile than Tachan Securities Co. It trades about -0.08 of its total potential returns per unit of risk. Tachan Securities Co is currently generating about 0.1 per unit of volatility. If you would invest  1,842  in Tachan Securities Co on March 2, 2024 and sell it today you would earn a total of  68.00  from holding Tachan Securities Co or generate 3.69% return on investment over 90 days.

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

Innolux Corp  vs.  Tachan Securities Co

Innolux Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Innolux Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Tachan Securities

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tachan Securities Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Tachan Securities may actually be approaching a critical reversion point that can send shares even higher in July 2024.

Pair Trading with Innolux Corp and Tachan Securities

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

The idea behind Innolux Corp and Tachan Securities Co 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.