Correlation Between Innolux Corp and Eson Precision

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

By analyzing existing cross correlation between Innolux Corp and Eson Precision Ind, you can compare the effects of market volatilities on Innolux Corp and Eson Precision 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 Eson Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Innolux Corp and Eson Precision.

Diversification Opportunities for Innolux Corp and Eson Precision

0.0

Correlation Coefficient

Innolux Corp  Eson Precision

Pay attention - limited upside

The 3 months correlation between Innolux and Eson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Innolux Corp and Eson Precision Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eson Precision Ind 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 Eson Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eson Precision Ind has no effect on the direction of Innolux Corp i.e., Innolux Corp and Eson Precision go up and down completely randomly.

Pair Corralation between Innolux Corp and Eson Precision

If you would invest  0.00  in Eson Precision Ind on January 28, 2024 and sell it today you would earn a total of  0.00  from holding Eson Precision Ind or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

Innolux Corp  vs.  Eson Precision Ind

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 abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in May 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Eson Precision Ind

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eson Precision Ind has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Eson Precision is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Innolux Corp and Eson Precision

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

The idea behind Innolux Corp and Eson Precision Ind 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.