Correlation Between Iljin Display and Moonbae Steel
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Moonbae Steel 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 Display and Moonbae Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Moonbae Steel, you can compare the effects of market volatilities on Iljin Display and Moonbae Steel 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 Display with a short position of Moonbae Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Moonbae Steel.
Diversification Opportunities for Iljin Display and Moonbae Steel
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iljin and Moonbae is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Moonbae Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Moonbae Steel and Iljin Display 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 Display are associated (or correlated) with Moonbae Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Moonbae Steel has no effect on the direction of Iljin Display i.e., Iljin Display and Moonbae Steel go up and down completely randomly.
Pair Corralation between Iljin Display and Moonbae Steel
Assuming the 90 days trading horizon Iljin Display is expected to generate 1.58 times more return on investment than Moonbae Steel. However, Iljin Display is 1.58 times more volatile than Moonbae Steel. It trades about 0.02 of its potential returns per unit of risk. Moonbae Steel is currently generating about -0.18 per unit of risk. If you would invest 86,500 in Iljin Display on November 7, 2024 and sell it today you would earn a total of 200.00 from holding Iljin Display or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Moonbae Steel
Performance |
| Timeline |
| Iljin Display |
| Moonbae Steel |
Iljin Display and Moonbae Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Moonbae Steel
The main advantage of trading using opposite Iljin Display and Moonbae Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Moonbae Steel 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 Moonbae Steel will offset losses from the drop in Moonbae Steel's long position.| Iljin Display vs. INFINITT Healthcare Co | Iljin Display vs. NewFlex Technology Co | Iljin Display vs. LG Household Healthcare | Iljin Display vs. Youngsin Metal Industrial |
| Moonbae Steel vs. Lotte Non Life Insurance | Moonbae Steel vs. Woori Technology Investment | Moonbae Steel vs. DSC Investment | Moonbae Steel vs. Hanjin Transportation 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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