Correlation Between Kg Chemical and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Kg Chemical 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 Kg Chemical and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kg Chemical and Ilji Technology Co, you can compare the effects of market volatilities on Kg Chemical 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 Kg Chemical with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kg Chemical and Ilji Technology.
Diversification Opportunities for Kg Chemical and Ilji Technology
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 001390 and Ilji is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kg Chemical and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and Kg Chemical 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 Kg Chemical 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 Kg Chemical i.e., Kg Chemical and Ilji Technology go up and down completely randomly.
Pair Corralation between Kg Chemical and Ilji Technology
Assuming the 90 days trading horizon Kg Chemical is expected to under-perform the Ilji Technology. In addition to that, Kg Chemical is 1.23 times more volatile than Ilji Technology Co. It trades about 0.0 of its total potential returns per unit of risk. Ilji Technology Co is currently generating about 0.16 per unit of volatility. If you would invest 367,587 in Ilji Technology Co on October 30, 2024 and sell it today you would earn a total of 42,413 from holding Ilji Technology Co or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kg Chemical vs. Ilji Technology Co
Performance |
| Timeline |
| Kg Chemical |
| Ilji Technology |
Kg Chemical and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kg Chemical and Ilji Technology
The main advantage of trading using opposite Kg Chemical and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kg Chemical 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.| Kg Chemical vs. CKH Food Health | Kg Chemical vs. Jin Air Co | Kg Chemical vs. INFINITT Healthcare Co | Kg Chemical vs. SAMG Entertainment Co |
| Ilji Technology vs. Samhyun Steel Co | Ilji Technology vs. LEENO Industrial | Ilji Technology vs. Hyunwoo Industrial Co | Ilji Technology vs. Samick Musical Instruments |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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