Correlation Between Moonbae Steel and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Moonbae Steel 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 Moonbae Steel and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Moonbae Steel and Iljin Display, you can compare the effects of market volatilities on Moonbae Steel 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 Moonbae Steel with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Moonbae Steel and Iljin Display.
Diversification Opportunities for Moonbae Steel and Iljin Display
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Moonbae and Iljin is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Moonbae Steel and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Moonbae Steel 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 Moonbae Steel 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 Moonbae Steel i.e., Moonbae Steel and Iljin Display go up and down completely randomly.
Pair Corralation between Moonbae Steel and Iljin Display
Assuming the 90 days trading horizon Moonbae Steel is expected to generate 2.67 times more return on investment than Iljin Display. However, Moonbae Steel is 2.67 times more volatile than Iljin Display. It trades about 0.05 of its potential returns per unit of risk. Iljin Display is currently generating about -0.02 per unit of risk. If you would invest 220,000 in Moonbae Steel on September 13, 2024 and sell it today you would earn a total of 6,500 from holding Moonbae Steel or generate 2.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Moonbae Steel vs. Iljin Display
Performance |
| Timeline |
| Moonbae Steel |
| Iljin Display |
Moonbae Steel and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Moonbae Steel and Iljin Display
The main advantage of trading using opposite Moonbae Steel and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moonbae Steel 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.| Moonbae Steel vs. LG Chemicals | Moonbae Steel vs. POSCO Holdings | Moonbae Steel vs. Hanwha Solutions | Moonbae Steel vs. Lotte Chemical Corp |
| Iljin Display vs. DAEDUCK ELECTRONICS CoLtd | Iljin Display vs. Sungmoon Electronics Co | Iljin Display vs. Solution Advanced Technology | Iljin Display vs. Busan 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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