Correlation Between Kukdong Oil and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Kukdong Oil 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 Kukdong Oil and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdong Oil Chemicals and Iljin Display, you can compare the effects of market volatilities on Kukdong Oil 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 Kukdong Oil with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdong Oil and Iljin Display.
Diversification Opportunities for Kukdong Oil and Iljin Display
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kukdong and Iljin is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kukdong Oil Chemicals and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil i.e., Kukdong Oil and Iljin Display go up and down completely randomly.
Pair Corralation between Kukdong Oil and Iljin Display
Assuming the 90 days trading horizon Kukdong Oil Chemicals is expected to under-perform the Iljin Display. But the stock apears to be less risky and, when comparing its historical volatility, Kukdong Oil Chemicals is 5.6 times less risky than Iljin Display. The stock trades about -0.43 of its potential returns per unit of risk. The Iljin Display is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 86,500 in Iljin Display on November 5, 2024 and sell it today you would earn a total of 1,800 from holding Iljin Display or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukdong Oil Chemicals vs. Iljin Display
Performance |
| Timeline |
| Kukdong Oil Chemicals |
| Iljin Display |
Kukdong Oil and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdong Oil and Iljin Display
The main advantage of trading using opposite Kukdong Oil and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdong Oil 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.| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
| Iljin Display vs. Daechang Steel Co | Iljin Display vs. Hankuk Steel Wire | Iljin Display vs. Seah Steel Corp | Iljin Display vs. Haitai Confectionery Foods |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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