Correlation Between Taekwang Ind and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Taekwang Ind 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 Taekwang Ind and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taekwang Ind and Iljin Display, you can compare the effects of market volatilities on Taekwang Ind 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 Taekwang Ind with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taekwang Ind and Iljin Display.
Diversification Opportunities for Taekwang Ind and Iljin Display
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Taekwang and Iljin is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Taekwang Ind and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Taekwang Ind 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 Taekwang Ind 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 Taekwang Ind i.e., Taekwang Ind and Iljin Display go up and down completely randomly.
Pair Corralation between Taekwang Ind and Iljin Display
Assuming the 90 days trading horizon Taekwang Ind is expected to generate 2.25 times more return on investment than Iljin Display. However, Taekwang Ind is 2.25 times more volatile than Iljin Display. It trades about -0.07 of its potential returns per unit of risk. Iljin Display is currently generating about -0.19 per unit of risk. If you would invest 65,200,000 in Taekwang Ind on September 1, 2024 and sell it today you would lose (2,800,000) from holding Taekwang Ind or give up 4.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taekwang Ind vs. Iljin Display
Performance |
| Timeline |
| Taekwang Ind |
| Iljin Display |
Taekwang Ind and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taekwang Ind and Iljin Display
The main advantage of trading using opposite Taekwang Ind and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taekwang Ind 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.| Taekwang Ind vs. Korea Computer | Taekwang Ind vs. Shinsegae Information Communication | Taekwang Ind vs. Sam Yang Foods | Taekwang Ind vs. Nice Information Telecommunication |
| Iljin Display vs. Automobile Pc | Iljin Display vs. Wonil Special Steel | Iljin Display vs. Korea Information Communications | Iljin Display vs. Hwangkum Steel Technology |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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