Correlation Between SBI Investment and Iljin Display
Can any of the company-specific risk be diversified away by investing in both SBI Investment and Iljin Display 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 SBI Investment and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Investment KOREA and Iljin Display, you can compare the effects of market volatilities on SBI Investment and Iljin Display 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 SBI Investment with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Investment and Iljin Display.
Diversification Opportunities for SBI Investment and Iljin Display
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SBI and Iljin is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SBI Investment KOREA and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and SBI Investment 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 SBI Investment KOREA are associated (or correlated) with Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of SBI Investment i.e., SBI Investment and Iljin Display go up and down completely randomly.
Pair Corralation between SBI Investment and Iljin Display
Assuming the 90 days trading horizon SBI Investment KOREA is expected to generate 2.12 times more return on investment than Iljin Display. However, SBI Investment is 2.12 times more volatile than Iljin Display. It trades about 0.04 of its potential returns per unit of risk. Iljin Display is currently generating about -0.07 per unit of risk. If you would invest 74,600 in SBI Investment KOREA on October 24, 2024 and sell it today you would earn a total of 4,800 from holding SBI Investment KOREA or generate 6.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Investment KOREA vs. Iljin Display
Performance |
| Timeline |
| SBI Investment KOREA |
| Iljin Display |
SBI Investment and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Investment and Iljin Display
The main advantage of trading using opposite SBI Investment and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Investment position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| SBI Investment vs. Sangsangin Investment Securities | SBI Investment vs. DB Financial Investment | SBI Investment vs. Leaders Technology Investment | SBI Investment vs. Woori Technology Investment |
| Iljin Display vs. Digital Power Communications | Iljin Display vs. SBI Investment KOREA | Iljin Display vs. DSC Investment | Iljin Display 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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