Correlation Between Ilji Technology and Jeju Air
Can any of the company-specific risk be diversified away by investing in both Ilji Technology and Jeju 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 Jeju 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 Jeju Air Co, you can compare the effects of market volatilities on Ilji Technology and Jeju 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 Jeju Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ilji Technology and Jeju Air.
Diversification Opportunities for Ilji Technology and Jeju Air
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ilji and Jeju is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ilji Technology Co and Jeju Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeju Air 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 Jeju Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeju Air has no effect on the direction of Ilji Technology i.e., Ilji Technology and Jeju Air go up and down completely randomly.
Pair Corralation between Ilji Technology and Jeju Air
Assuming the 90 days trading horizon Ilji Technology Co is expected to generate 1.05 times more return on investment than Jeju Air. However, Ilji Technology is 1.05 times more volatile than Jeju Air Co. It trades about 0.6 of its potential returns per unit of risk. Jeju Air Co is currently generating about 0.17 per unit of risk. If you would invest 352,000 in Ilji Technology Co on November 2, 2024 and sell it today you would earn a total of 58,000 from holding Ilji Technology Co or generate 16.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ilji Technology Co vs. Jeju Air Co
Performance |
| Timeline |
| Ilji Technology |
| Jeju Air |
Ilji Technology and Jeju Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ilji Technology and Jeju Air
The main advantage of trading using opposite Ilji Technology and Jeju Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ilji Technology position performs unexpectedly, Jeju 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 Jeju Air will offset losses from the drop in Jeju Air's long position.| Ilji Technology vs. Hwasung Industrial Co | Ilji Technology vs. Songwon Industrial Co | Ilji Technology vs. Hyunwoo Industrial Co | Ilji Technology vs. Daiyang Metal Co |
| Jeju Air vs. Display Tech Co | Jeju Air vs. Lee Ku Industrial | Jeju Air vs. LEENO Industrial | Jeju Air vs. Nice Information Telecommunication |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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