Correlation Between Iljin Display and Automobile
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Automobile 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 Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Automobile Pc, you can compare the effects of market volatilities on Iljin Display and Automobile 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 Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Automobile.
Diversification Opportunities for Iljin Display and Automobile
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Iljin and Automobile is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Automobile Pc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automobile Pc 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 Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automobile Pc has no effect on the direction of Iljin Display i.e., Iljin Display and Automobile go up and down completely randomly.
Pair Corralation between Iljin Display and Automobile
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the Automobile. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Display is 4.3 times less risky than Automobile. The stock trades about -0.19 of its potential returns per unit of risk. The Automobile Pc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 69,300 in Automobile Pc on September 1, 2024 and sell it today you would lose (1,300) from holding Automobile Pc or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Automobile Pc
Performance |
| Timeline |
| Iljin Display |
| Automobile Pc |
Iljin Display and Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Automobile
The main advantage of trading using opposite Iljin Display and Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Automobile 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 Automobile will offset losses from the drop in Automobile's long position.| Iljin Display vs. Automobile Pc | Iljin Display vs. Wonil Special Steel | Iljin Display vs. Korea Information Communications | Iljin Display vs. Hwangkum Steel Technology |
| Automobile vs. Miwon Chemical | Automobile vs. Sung Bo Chemicals | Automobile vs. Chin Yang Chemical | Automobile vs. Daehan Synthetic Fiber |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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