Correlation Between Ilji Technology and Daou Technology
Can any of the company-specific risk be diversified away by investing in both Ilji Technology and Daou 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 Ilji Technology and Daou Technology 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 Daou Technology, you can compare the effects of market volatilities on Ilji Technology and Daou 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 Ilji Technology with a short position of Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilji Technology and Daou Technology.
Diversification Opportunities for Ilji Technology and Daou Technology
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ilji and Daou is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Ilji Technology Co and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou Technology 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 Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of Ilji Technology i.e., Ilji Technology and Daou Technology go up and down completely randomly.
Pair Corralation between Ilji Technology and Daou Technology
Assuming the 90 days trading horizon Ilji Technology Co is expected to generate 1.35 times more return on investment than Daou Technology. However, Ilji Technology is 1.35 times more volatile than Daou Technology. It trades about 0.03 of its potential returns per unit of risk. Daou Technology is currently generating about 0.02 per unit of risk. If you would invest 373,010 in Ilji Technology Co on October 28, 2024 and sell it today you would earn a total of 36,990 from holding Ilji Technology Co or generate 9.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ilji Technology Co vs. Daou Technology
Performance |
| Timeline |
| Ilji Technology |
| Daou Technology |
Ilji Technology and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilji Technology and Daou Technology
The main advantage of trading using opposite Ilji Technology and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilji Technology position performs unexpectedly, Daou 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 Daou Technology will offset losses from the drop in Daou Technology'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 |
| Daou Technology vs. KB Financial Group | Daou Technology vs. Shinhan Financial Group | Daou Technology vs. Hana Financial | Daou Technology vs. Woori Financial Group |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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