Correlation Between Plant Advanced and Innelec Multimedia

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

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

Diversification Opportunities for Plant Advanced and Innelec Multimedia

-0.49

Correlation Coefficient

Plant Advanced  Innelec Multimedia

Very good diversification

The 3 months correlation between Plant and Innelec is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Plant Advanced Technologies and Innelec Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Innelec Multimedia and Plant Advanced 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 Plant Advanced Technologies are associated (or correlated) with Innelec Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Innelec Multimedia has no effect on the direction of Plant Advanced i.e., Plant Advanced and Innelec Multimedia go up and down completely randomly.

Pair Corralation between Plant Advanced and Innelec Multimedia

Assuming the 90 days trading horizon Plant Advanced Technologies is expected to under-perform the Innelec Multimedia. In addition to that, Plant Advanced is 1.01 times more volatile than Innelec Multimedia. It trades about -0.06 of its total potential returns per unit of risk. Innelec Multimedia is currently generating about 0.15 per unit of volatility. If you would invest  278.00  in Innelec Multimedia on April 22, 2025 and sell it today you would earn a total of  61.00  from holding Innelec Multimedia or generate 21.94% return on investment over 90 days.

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

Plant Advanced Technologies  vs.  Innelec Multimedia

Plant Advanced Techn

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plant Advanced Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Innelec Multimedia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Innelec Multimedia are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Innelec Multimedia reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Plant Advanced and Innelec Multimedia

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

The idea behind Plant Advanced Technologies and Innelec Multimedia 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 Stocks Directory module to find actively traded stocks across global markets.