Correlation Between Iljin Materials and Daishin Balance
Can any of the company-specific risk be diversified away by investing in both Iljin Materials and Daishin Balance 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 Daishin Balance 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 Daishin Balance 1, you can compare the effects of market volatilities on Iljin Materials and Daishin Balance 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 Daishin Balance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Materials and Daishin Balance.
Diversification Opportunities for Iljin Materials and Daishin Balance
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Iljin and Daishin is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Materials Co and Daishin Balance 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin Balance 1 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 Daishin Balance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Balance 1 has no effect on the direction of Iljin Materials i.e., Iljin Materials and Daishin Balance go up and down completely randomly.
Pair Corralation between Iljin Materials and Daishin Balance
Assuming the 90 days trading horizon Iljin Materials Co is expected to under-perform the Daishin Balance. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Materials Co is 1.18 times less risky than Daishin Balance. The stock trades about -0.68 of its potential returns per unit of risk. The Daishin Balance 1 is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 512,000 in Daishin Balance 1 on September 3, 2024 and sell it today you would earn a total of 26,000 from holding Daishin Balance 1 or generate 5.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Materials Co vs. Daishin Balance 1
Performance |
| Timeline |
| Iljin Materials |
| Daishin Balance 1 |
Iljin Materials and Daishin Balance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Materials and Daishin Balance
The main advantage of trading using opposite Iljin Materials and Daishin Balance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Materials position performs unexpectedly, Daishin Balance 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 Daishin Balance will offset losses from the drop in Daishin Balance'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 |
| Daishin Balance vs. ABCO Electronics Co | Daishin Balance vs. LG Electronics | Daishin Balance vs. Okins Electronics Co | Daishin Balance vs. Sungmoon Electronics 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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