Correlation Between Ilji Technology and Korean Air
Can any of the company-specific risk be diversified away by investing in both Ilji Technology and Korean Air 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 Ilji Technology and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ilji Technology Co and Korean Air Lines, you can compare the effects of market volatilities on Ilji Technology and Korean Air 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 Ilji Technology with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilji Technology and Korean Air.
Diversification Opportunities for Ilji Technology and Korean Air
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ilji and Korean is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Ilji Technology Co and Korean Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Air Lines and Ilji Technology 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 Ilji Technology Co are associated (or correlated) with Korean Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Air Lines has no effect on the direction of Ilji Technology i.e., Ilji Technology and Korean Air go up and down completely randomly.
Pair Corralation between Ilji Technology and Korean Air
Assuming the 90 days trading horizon Ilji Technology is expected to generate 4.04 times less return on investment than Korean Air. In addition to that, Ilji Technology is 1.95 times more volatile than Korean Air Lines. It trades about 0.0 of its total potential returns per unit of risk. Korean Air Lines is currently generating about 0.04 per unit of volatility. If you would invest 2,189,375 in Korean Air Lines on September 4, 2024 and sell it today you would earn a total of 375,625 from holding Korean Air Lines or generate 17.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ilji Technology Co vs. Korean Air Lines
Performance |
| Timeline |
| Ilji Technology |
| Korean Air Lines |
Ilji Technology and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilji Technology and Korean Air
The main advantage of trading using opposite Ilji Technology and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilji Technology position performs unexpectedly, Korean Air 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 Korean Air will offset losses from the drop in Korean Air's long position.| Ilji Technology vs. Korea Real Estate | Ilji Technology vs. Busan Industrial Co | Ilji Technology vs. UNISEM Co | Ilji Technology vs. RPBio Inc |
| Korean Air vs. Phoenix Materials Co | Korean Air vs. Dongbang Transport Logistics | Korean Air vs. Hanjin Transportation Co | Korean Air vs. Hyundai Engineering Plastics |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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