Correlation Between Sung Bo and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Sung Bo and Iljin Display 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 Sung Bo and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and Iljin Display, you can compare the effects of market volatilities on Sung Bo and Iljin Display 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 Sung Bo with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Iljin Display.
Diversification Opportunities for Sung Bo and Iljin Display
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sung and Iljin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Sung Bo 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 Sung Bo Chemicals are associated (or correlated) with Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of Sung Bo i.e., Sung Bo and Iljin Display go up and down completely randomly.
Pair Corralation between Sung Bo and Iljin Display
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to generate 0.46 times more return on investment than Iljin Display. However, Sung Bo Chemicals is 2.2 times less risky than Iljin Display. It trades about 0.04 of its potential returns per unit of risk. Iljin Display is currently generating about -0.02 per unit of risk. If you would invest 248,317 in Sung Bo Chemicals on October 26, 2024 and sell it today you would earn a total of 4,683 from holding Sung Bo Chemicals or generate 1.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Iljin Display
Performance |
| Timeline |
| Sung Bo Chemicals |
| Iljin Display |
Sung Bo and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Iljin Display
The main advantage of trading using opposite Sung Bo and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| Sung Bo vs. KB Financial Group | Sung Bo vs. Shinhan Financial Group | Sung Bo vs. Hana Financial | Sung Bo vs. Woori Financial Group |
| Iljin Display vs. Sung Bo Chemicals | Iljin Display vs. Eagon Industrial Co | Iljin Display vs. Kukdong Oil Chemicals | Iljin Display vs. Hyunwoo Industrial Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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