Correlation Between Iljin Materials and Shinsegae Information
Can any of the company-specific risk be diversified away by investing in both Iljin Materials and Shinsegae Information 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 Shinsegae Information 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 Shinsegae Information Communication, you can compare the effects of market volatilities on Iljin Materials and Shinsegae Information 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 Shinsegae Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Materials and Shinsegae Information.
Diversification Opportunities for Iljin Materials and Shinsegae Information
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iljin and Shinsegae is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Materials Co and Shinsegae Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Information 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 Shinsegae Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Information has no effect on the direction of Iljin Materials i.e., Iljin Materials and Shinsegae Information go up and down completely randomly.
Pair Corralation between Iljin Materials and Shinsegae Information
Assuming the 90 days trading horizon Iljin Materials Co is expected to under-perform the Shinsegae Information. In addition to that, Iljin Materials is 1.59 times more volatile than Shinsegae Information Communication. It trades about -0.68 of its total potential returns per unit of risk. Shinsegae Information Communication is currently generating about -0.22 per unit of volatility. If you would invest 985,000 in Shinsegae Information Communication on August 29, 2024 and sell it today you would lose (76,000) from holding Shinsegae Information Communication or give up 7.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Materials Co vs. Shinsegae Information Communic
Performance |
| Timeline |
| Iljin Materials |
| Shinsegae Information |
Iljin Materials and Shinsegae Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Materials and Shinsegae Information
The main advantage of trading using opposite Iljin Materials and Shinsegae Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Materials position performs unexpectedly, Shinsegae Information 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 Shinsegae Information will offset losses from the drop in Shinsegae Information's long position.| Iljin Materials vs. Samsung Electronics Co | Iljin Materials vs. Samsung Electronics Co | Iljin Materials vs. LG Energy Solution | Iljin Materials vs. SK Hynix |
| Shinsegae Information vs. AptaBio Therapeutics | Shinsegae Information vs. Daewoo SBI SPAC | Shinsegae Information vs. Dream Security co | Shinsegae Information vs. Microfriend |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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