Correlation Between Ilji Technology and Wonbang Tech
Can any of the company-specific risk be diversified away by investing in both Ilji Technology and Wonbang Tech 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 Wonbang Tech 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 Wonbang Tech Co, you can compare the effects of market volatilities on Ilji Technology and Wonbang Tech 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 Wonbang Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilji Technology and Wonbang Tech.
Diversification Opportunities for Ilji Technology and Wonbang Tech
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ilji and Wonbang is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ilji Technology Co and Wonbang Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wonbang Tech 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 Wonbang Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wonbang Tech has no effect on the direction of Ilji Technology i.e., Ilji Technology and Wonbang Tech go up and down completely randomly.
Pair Corralation between Ilji Technology and Wonbang Tech
Assuming the 90 days trading horizon Ilji Technology is expected to generate 1.6 times less return on investment than Wonbang Tech. But when comparing it to its historical volatility, Ilji Technology Co is 1.41 times less risky than Wonbang Tech. It trades about 0.04 of its potential returns per unit of risk. Wonbang Tech Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 987,572 in Wonbang Tech Co on August 29, 2024 and sell it today you would earn a total of 407,428 from holding Wonbang Tech Co or generate 41.26% 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. Wonbang Tech Co
Performance |
| Timeline |
| Ilji Technology |
| Wonbang Tech |
Ilji Technology and Wonbang Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilji Technology and Wonbang Tech
The main advantage of trading using opposite Ilji Technology and Wonbang Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilji Technology position performs unexpectedly, Wonbang Tech 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 Wonbang Tech will offset losses from the drop in Wonbang Tech's long position.| Ilji Technology vs. Ssangyong Information Communication | Ilji Technology vs. Daishin Information Communications | Ilji Technology vs. FNSTech Co | Ilji Technology vs. GS Retail Co |
| Wonbang Tech vs. Lotte Non Life Insurance | Wonbang Tech vs. InfoBank | Wonbang Tech vs. Heungkuk Metaltech CoLtd | Wonbang Tech vs. Total Soft Bank |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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