Correlation Between Iljin Materials and GS Engineering
Can any of the company-specific risk be diversified away by investing in both Iljin Materials and GS Engineering 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 Iljin Materials and GS Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Materials Co and GS Engineering Construction, you can compare the effects of market volatilities on Iljin Materials and GS Engineering 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 Iljin Materials with a short position of GS Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Materials and GS Engineering.
Diversification Opportunities for Iljin Materials and GS Engineering
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Iljin and 006360 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Materials Co and GS Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GS Engineering Const and Iljin Materials 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 Iljin Materials Co are associated (or correlated) with GS Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GS Engineering Const has no effect on the direction of Iljin Materials i.e., Iljin Materials and GS Engineering go up and down completely randomly.
Pair Corralation between Iljin Materials and GS Engineering
Assuming the 90 days trading horizon Iljin Materials Co is expected to under-perform the GS Engineering. In addition to that, Iljin Materials is 1.34 times more volatile than GS Engineering Construction. It trades about -0.03 of its total potential returns per unit of risk. GS Engineering Construction is currently generating about 0.0 per unit of volatility. If you would invest 2,020,399 in GS Engineering Construction on August 27, 2024 and sell it today you would lose (170,399) from holding GS Engineering Construction or give up 8.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Materials Co vs. GS Engineering Construction
Performance |
| Timeline |
| Iljin Materials |
| GS Engineering Const |
Iljin Materials and GS Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Materials and GS Engineering
The main advantage of trading using opposite Iljin Materials and GS Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Materials position performs unexpectedly, GS Engineering 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 GS Engineering will offset losses from the drop in GS Engineering's long position.| Iljin Materials vs. Intellian Technologies | Iljin Materials vs. Dongwon Metal Co | Iljin Materials vs. Konan Technology | Iljin Materials vs. Duksan Hi Metal |
| GS Engineering vs. Hanmi Semiconductor Co | GS Engineering vs. Netmarble Games Corp | GS Engineering vs. Kakao Games Corp | GS Engineering vs. Sam Yang Foods |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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