Correlation Between Iljin Materials and ChipsMedia
Can any of the company-specific risk be diversified away by investing in both Iljin Materials and ChipsMedia 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 ChipsMedia 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 ChipsMedia, you can compare the effects of market volatilities on Iljin Materials and ChipsMedia 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 ChipsMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Materials and ChipsMedia.
Diversification Opportunities for Iljin Materials and ChipsMedia
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iljin and ChipsMedia is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Materials Co and ChipsMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ChipsMedia 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 ChipsMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ChipsMedia has no effect on the direction of Iljin Materials i.e., Iljin Materials and ChipsMedia go up and down completely randomly.
Pair Corralation between Iljin Materials and ChipsMedia
Assuming the 90 days trading horizon Iljin Materials Co is expected to under-perform the ChipsMedia. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Materials Co is 1.32 times less risky than ChipsMedia. The stock trades about -0.02 of its potential returns per unit of risk. The ChipsMedia is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,883,969 in ChipsMedia on January 23, 2025 and sell it today you would lose (183,969) from holding ChipsMedia or give up 9.76% 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. ChipsMedia
Performance |
| Timeline |
| Iljin Materials |
| ChipsMedia |
Iljin Materials and ChipsMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Materials and ChipsMedia
The main advantage of trading using opposite Iljin Materials and ChipsMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Materials position performs unexpectedly, ChipsMedia 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 ChipsMedia will offset losses from the drop in ChipsMedia's long position.| Iljin Materials vs. Intellian Technologies | Iljin Materials vs. Kyung In Synthetic Corp | Iljin Materials vs. Hannong Chemicals | Iljin Materials vs. Youngbo Chemical Co |
| ChipsMedia vs. Korean Drug Co | ChipsMedia vs. Cheryong Industrial CoLtd | ChipsMedia vs. Solution Advanced Technology | ChipsMedia vs. Busan Industrial Co |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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