Correlation Between Iljin Materials and Incar Financial
Can any of the company-specific risk be diversified away by investing in both Iljin Materials and Incar Financial 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 Incar Financial 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 Incar Financial Service, you can compare the effects of market volatilities on Iljin Materials and Incar Financial 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 Incar Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Materials and Incar Financial.
Diversification Opportunities for Iljin Materials and Incar Financial
-0.88 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Iljin and Incar is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Materials Co and Incar Financial Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Incar Financial Service 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 Incar Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Incar Financial Service has no effect on the direction of Iljin Materials i.e., Iljin Materials and Incar Financial go up and down completely randomly.
Pair Corralation between Iljin Materials and Incar Financial
Assuming the 90 days trading horizon Iljin Materials Co is expected to under-perform the Incar Financial. In addition to that, Iljin Materials is 1.14 times more volatile than Incar Financial Service. It trades about -0.1 of its total potential returns per unit of risk. Incar Financial Service is currently generating about 0.1 per unit of volatility. If you would invest 432,000 in Incar Financial Service on September 4, 2024 and sell it today you would earn a total of 204,000 from holding Incar Financial Service or generate 47.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 93.75% |
| Values | Daily Returns |
Iljin Materials Co vs. Incar Financial Service
Performance |
| Timeline |
| Iljin Materials |
| Incar Financial Service |
Iljin Materials and Incar Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Materials and Incar Financial
The main advantage of trading using opposite Iljin Materials and Incar Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Materials position performs unexpectedly, Incar Financial 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 Incar Financial will offset losses from the drop in Incar Financial's long position.| Iljin Materials vs. Next Entertainment World | Iljin Materials vs. Cube Entertainment | Iljin Materials vs. SM Entertainment Co | Iljin Materials vs. MediaZen |
| Incar Financial vs. Busan Industrial Co | Incar Financial vs. UNISEM Co | Incar Financial vs. RPBio Inc | Incar Financial vs. Finebesteel |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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