Correlation Between Iljin Display and Busan Ind
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Busan Ind 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 Busan Ind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Busan Ind, you can compare the effects of market volatilities on Iljin Display and Busan Ind 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 Busan Ind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Busan Ind.
Diversification Opportunities for Iljin Display and Busan Ind
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iljin and Busan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Busan Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Busan Ind 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 Busan Ind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Busan Ind has no effect on the direction of Iljin Display i.e., Iljin Display and Busan Ind go up and down completely randomly.
Pair Corralation between Iljin Display and Busan Ind
Assuming the 90 days trading horizon Iljin Display is expected to generate 1.26 times more return on investment than Busan Ind. However, Iljin Display is 1.26 times more volatile than Busan Ind. It trades about 0.06 of its potential returns per unit of risk. Busan Ind is currently generating about -0.24 per unit of risk. If you would invest 88,300 in Iljin Display on October 15, 2024 and sell it today you would earn a total of 1,900 from holding Iljin Display or generate 2.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Busan Ind
Performance |
| Timeline |
| Iljin Display |
| Busan Ind |
Iljin Display and Busan Ind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Busan Ind
The main advantage of trading using opposite Iljin Display and Busan Ind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Busan Ind 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 Busan Ind will offset losses from the drop in Busan Ind's long position.| Iljin Display vs. Puloon Technology | Iljin Display vs. Eagle Veterinary Technology | Iljin Display vs. Youngsin Metal Industrial | Iljin Display vs. Digital Imaging Technology |
| Busan Ind vs. Hansol Homedeco Co | Busan Ind vs. Alton Sports CoLtd | Busan Ind vs. Iljin Display | Busan Ind vs. Korea Alcohol Industrial |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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