Correlation Between Iljin Display and Korea Zinc
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Korea Zinc 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 Korea Zinc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Korea Zinc, you can compare the effects of market volatilities on Iljin Display and Korea Zinc 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 Korea Zinc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Korea Zinc.
Diversification Opportunities for Iljin Display and Korea Zinc
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Iljin and Korea is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Korea Zinc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Zinc 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 Korea Zinc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Zinc has no effect on the direction of Iljin Display i.e., Iljin Display and Korea Zinc go up and down completely randomly.
Pair Corralation between Iljin Display and Korea Zinc
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the Korea Zinc. In addition to that, Iljin Display is 1.26 times more volatile than Korea Zinc. It trades about -0.02 of its total potential returns per unit of risk. Korea Zinc is currently generating about 0.12 per unit of volatility. If you would invest 45,449,500 in Korea Zinc on September 12, 2024 and sell it today you would earn a total of 54,550,500 from holding Korea Zinc or generate 120.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Korea Zinc
Performance |
| Timeline |
| Iljin Display |
| Korea Zinc |
Iljin Display and Korea Zinc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Korea Zinc
The main advantage of trading using opposite Iljin Display and Korea Zinc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Korea Zinc 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 Korea Zinc will offset losses from the drop in Korea Zinc's long position.| Iljin Display vs. DAEDUCK ELECTRONICS CoLtd | Iljin Display vs. Sungmoon Electronics Co | Iljin Display vs. Solution Advanced Technology | Iljin Display vs. Busan Industrial Co |
| Korea Zinc vs. Haitai Confectionery Foods | Korea Zinc vs. Hwangkum Steel Technology | Korea Zinc vs. Global Standard Technology | Korea Zinc vs. Neungyule Education |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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