Correlation Between Korea Shipbuilding and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Korea Shipbuilding 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 Korea Shipbuilding and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Shipbuilding Offshore and Ilji Technology Co, you can compare the effects of market volatilities on Korea Shipbuilding 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 Korea Shipbuilding with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Shipbuilding and Ilji Technology.
Diversification Opportunities for Korea Shipbuilding and Ilji Technology
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and Ilji is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Korea Shipbuilding Offshore and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and Korea Shipbuilding 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 Korea Shipbuilding Offshore 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 Korea Shipbuilding i.e., Korea Shipbuilding and Ilji Technology go up and down completely randomly.
Pair Corralation between Korea Shipbuilding and Ilji Technology
Assuming the 90 days trading horizon Korea Shipbuilding Offshore is expected to generate 0.87 times more return on investment than Ilji Technology. However, Korea Shipbuilding Offshore is 1.15 times less risky than Ilji Technology. It trades about 0.1 of its potential returns per unit of risk. Ilji Technology Co is currently generating about 0.04 per unit of risk. If you would invest 8,150,000 in Korea Shipbuilding Offshore on October 27, 2024 and sell it today you would earn a total of 14,700,000 from holding Korea Shipbuilding Offshore or generate 180.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Shipbuilding Offshore vs. Ilji Technology Co
Performance |
| Timeline |
| Korea Shipbuilding |
| Ilji Technology |
Korea Shipbuilding and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Shipbuilding and Ilji Technology
The main advantage of trading using opposite Korea Shipbuilding and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Shipbuilding 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.| Korea Shipbuilding vs. Nature and Environment | Korea Shipbuilding vs. Daehan Steel | Korea Shipbuilding vs. Moonbae Steel | Korea Shipbuilding vs. BGF Retail Co |
| Ilji Technology vs. Hironic Co | Ilji Technology vs. SCI Information Service | Ilji Technology vs. Nature and Environment | Ilji Technology vs. Hankuk Steel Wire |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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