Correlation Between Hanjin Transportation and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation 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 Hanjin Transportation and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and Ilji Technology Co, you can compare the effects of market volatilities on Hanjin Transportation 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 Hanjin Transportation with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Ilji Technology.
Diversification Opportunities for Hanjin Transportation and Ilji Technology
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanjin and Ilji is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation 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 Hanjin Transportation 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 Hanjin Transportation 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 Hanjin Transportation i.e., Hanjin Transportation and Ilji Technology go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Ilji Technology
Assuming the 90 days trading horizon Hanjin Transportation is expected to generate 27.65 times less return on investment than Ilji Technology. But when comparing it to its historical volatility, Hanjin Transportation Co is 2.54 times less risky than Ilji Technology. It trades about 0.04 of its potential returns per unit of risk. Ilji Technology Co is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 358,000 in Ilji Technology Co on October 28, 2024 and sell it today you would earn a total of 52,000 from holding Ilji Technology Co or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Ilji Technology Co
Performance |
| Timeline |
| Hanjin Transportation |
| Ilji Technology |
Hanjin Transportation and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Ilji Technology
The main advantage of trading using opposite Hanjin Transportation and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation 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.| Hanjin Transportation vs. Koryo Credit Information | Hanjin Transportation vs. SV Investment | Hanjin Transportation vs. Leaders Technology Investment | Hanjin Transportation vs. Insung Information Co |
| Ilji Technology vs. Hironic Co | Ilji Technology vs. Hankuk Steel Wire | Ilji Technology vs. Moonbae Steel | Ilji Technology vs. DONGKUK STEEL MILL |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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