Correlation Between Iljin Display and Ssangyong Information
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Ssangyong Information 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 Ssangyong Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Ssangyong Information Communication, you can compare the effects of market volatilities on Iljin Display and Ssangyong Information 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 Ssangyong Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Ssangyong Information.
Diversification Opportunities for Iljin Display and Ssangyong Information
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iljin and Ssangyong is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Ssangyong Information Communic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ssangyong Information 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 Ssangyong Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ssangyong Information has no effect on the direction of Iljin Display i.e., Iljin Display and Ssangyong Information go up and down completely randomly.
Pair Corralation between Iljin Display and Ssangyong Information
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the Ssangyong Information. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Display is 1.15 times less risky than Ssangyong Information. The stock trades about -0.25 of its potential returns per unit of risk. The Ssangyong Information Communication is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 60,300 in Ssangyong Information Communication on August 30, 2024 and sell it today you would earn a total of 2,100 from holding Ssangyong Information Communication or generate 3.48% 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. Ssangyong Information Communic
Performance |
| Timeline |
| Iljin Display |
| Ssangyong Information |
Iljin Display and Ssangyong Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Ssangyong Information
The main advantage of trading using opposite Iljin Display and Ssangyong Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Ssangyong Information 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 Ssangyong Information will offset losses from the drop in Ssangyong Information's long position.| Iljin Display vs. LG Display Co | Iljin Display vs. Organic Special Pet | Iljin Display vs. Display Tech Co | Iljin Display vs. ABOV Semiconductor Co |
| Ssangyong Information vs. Cafe24 Corp | Ssangyong Information vs. Korea Computer Systems | Ssangyong Information vs. Daishin Information Communications | Ssangyong Information vs. SSR Inc |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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