Correlation Between Ilji Technology and Keyang Electric
Can any of the company-specific risk be diversified away by investing in both Ilji Technology and Keyang Electric 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 Keyang Electric 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 Keyang Electric Machinery, you can compare the effects of market volatilities on Ilji Technology and Keyang Electric 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 Keyang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilji Technology and Keyang Electric.
Diversification Opportunities for Ilji Technology and Keyang Electric
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ilji and Keyang is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ilji Technology Co and Keyang Electric Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyang Electric Machinery 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 Keyang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyang Electric Machinery has no effect on the direction of Ilji Technology i.e., Ilji Technology and Keyang Electric go up and down completely randomly.
Pair Corralation between Ilji Technology and Keyang Electric
Assuming the 90 days trading horizon Ilji Technology Co is expected to generate 0.67 times more return on investment than Keyang Electric. However, Ilji Technology Co is 1.49 times less risky than Keyang Electric. It trades about 0.45 of its potential returns per unit of risk. Keyang Electric Machinery is currently generating about 0.13 per unit of risk. If you would invest 358,000 in Ilji Technology Co on October 28, 2024 and sell it today you would earn a total of 52,000 from holding Ilji Technology Co or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ilji Technology Co vs. Keyang Electric Machinery
Performance |
| Timeline |
| Ilji Technology |
| Keyang Electric Machinery |
Ilji Technology and Keyang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilji Technology and Keyang Electric
The main advantage of trading using opposite Ilji Technology and Keyang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilji Technology position performs unexpectedly, Keyang Electric 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 Keyang Electric will offset losses from the drop in Keyang Electric's long position.| Ilji Technology vs. Korea Investment Holdings | Ilji Technology vs. Daechang Steel Co | Ilji Technology vs. Husteel | Ilji Technology vs. SBI Investment KOREA |
| Keyang Electric vs. Stic Investments | Keyang Electric vs. Daol Investment Securities | Keyang Electric vs. TS Investment Corp | Keyang Electric vs. Nh Investment And |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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