Correlation Between DB HiTek and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both DB HiTek and Ilji Technology 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 DB HiTek and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB HiTek Co and Ilji Technology Co, you can compare the effects of market volatilities on DB HiTek and Ilji Technology 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 DB HiTek with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB HiTek and Ilji Technology.
Diversification Opportunities for DB HiTek and Ilji Technology
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 000990 and Ilji is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding DB HiTek Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and DB HiTek 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 DB HiTek Co are associated (or correlated) with Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of DB HiTek i.e., DB HiTek and Ilji Technology go up and down completely randomly.
Pair Corralation between DB HiTek and Ilji Technology
Assuming the 90 days trading horizon DB HiTek is expected to generate 5.77 times less return on investment than Ilji Technology. In addition to that, DB HiTek is 1.46 times more volatile than Ilji Technology Co. It trades about 0.05 of its total potential returns per unit of risk. Ilji Technology Co is currently generating about 0.41 per unit of volatility. If you would invest 351,055 in Ilji Technology Co on October 24, 2024 and sell it today you would earn a total of 43,445 from holding Ilji Technology Co or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB HiTek Co vs. Ilji Technology Co
Performance |
| Timeline |
| DB HiTek |
| Ilji Technology |
DB HiTek and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB HiTek and Ilji Technology
The main advantage of trading using opposite DB HiTek and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB HiTek position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology's long position.| DB HiTek vs. Ilji Technology Co | DB HiTek vs. Ssangyong Information Communication | DB HiTek vs. Koh Young Technology | DB HiTek vs. Guyoung Technology Co |
| Ilji Technology vs. KB Financial Group | Ilji Technology vs. Shinhan Financial Group | Ilji Technology vs. Hana Financial | Ilji Technology vs. Woori Financial Group |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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