Correlation Between Husteel and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Husteel 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 Husteel and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Husteel and Ilji Technology Co, you can compare the effects of market volatilities on Husteel 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 Husteel with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Husteel and Ilji Technology.
Diversification Opportunities for Husteel and Ilji Technology
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Husteel and Ilji is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Husteel and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and Husteel 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 Husteel 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 Husteel i.e., Husteel and Ilji Technology go up and down completely randomly.
Pair Corralation between Husteel and Ilji Technology
Assuming the 90 days trading horizon Husteel is expected to generate 1.81 times more return on investment than Ilji Technology. However, Husteel is 1.81 times more volatile than Ilji Technology Co. It trades about 0.42 of its potential returns per unit of risk. Ilji Technology Co is currently generating about 0.45 per unit of risk. If you would invest 378,000 in Husteel on October 29, 2024 and sell it today you would earn a total of 92,000 from holding Husteel or generate 24.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Husteel vs. Ilji Technology Co
Performance |
| Timeline |
| Husteel |
| Ilji Technology |
Husteel and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Husteel and Ilji Technology
The main advantage of trading using opposite Husteel and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Husteel 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.| Husteel vs. Hannong Chemicals | Husteel vs. Dongbu Insurance Co | Husteel vs. Mgame Corp | Husteel vs. DB Insurance 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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