Correlation Between Inmax Holding and Lien Chang
Can any of the company-specific risk be diversified away by investing in both Inmax Holding and Lien Chang 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 Inmax Holding and Lien Chang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Inmax Holding Co and Lien Chang Electronic, you can compare the effects of market volatilities on Inmax Holding and Lien Chang 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 Inmax Holding with a short position of Lien Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Inmax Holding and Lien Chang.
Diversification Opportunities for Inmax Holding and Lien Chang
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Inmax and Lien is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Inmax Holding Co and Lien Chang Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lien Chang Electronic and Inmax Holding 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 Inmax Holding Co are associated (or correlated) with Lien Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lien Chang Electronic has no effect on the direction of Inmax Holding i.e., Inmax Holding and Lien Chang go up and down completely randomly.
Pair Corralation between Inmax Holding and Lien Chang
Assuming the 90 days trading horizon Inmax Holding Co is expected to generate 0.95 times more return on investment than Lien Chang. However, Inmax Holding Co is 1.05 times less risky than Lien Chang. It trades about 0.04 of its potential returns per unit of risk. Lien Chang Electronic is currently generating about -0.16 per unit of risk. If you would invest 6,410 in Inmax Holding Co on February 4, 2024 and sell it today you would earn a total of 90.00 from holding Inmax Holding Co or generate 1.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.0% |
Values | Daily Returns |
Inmax Holding Co vs. Lien Chang Electronic
Performance |
Timeline |
Inmax Holding |
Lien Chang Electronic |
Inmax Holding and Lien Chang Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Inmax Holding and Lien Chang
The main advantage of trading using opposite Inmax Holding and Lien Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Inmax Holding position performs unexpectedly, Lien Chang 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 Lien Chang will offset losses from the drop in Lien Chang's long position.Inmax Holding vs. Yi Jinn Industrial | Inmax Holding vs. Tex Ray Industrial Co | Inmax Holding vs. Mobiletron Electronics Co | Inmax Holding vs. Grand Ocean Retail |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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