Correlation Between Iljin Display and Leaders Technology
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Leaders Technology 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 Leaders Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Leaders Technology Investment, you can compare the effects of market volatilities on Iljin Display and Leaders Technology 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 Leaders Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Leaders Technology.
Diversification Opportunities for Iljin Display and Leaders Technology
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Iljin and Leaders is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Leaders Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leaders Technology 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 Leaders Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leaders Technology has no effect on the direction of Iljin Display i.e., Iljin Display and Leaders Technology go up and down completely randomly.
Pair Corralation between Iljin Display and Leaders Technology
Assuming the 90 days trading horizon Iljin Display is expected to generate 0.61 times more return on investment than Leaders Technology. However, Iljin Display is 1.63 times less risky than Leaders Technology. It trades about -0.01 of its potential returns per unit of risk. Leaders Technology Investment is currently generating about -0.04 per unit of risk. If you would invest 128,700 in Iljin Display on October 18, 2024 and sell it today you would lose (37,600) from holding Iljin Display or give up 29.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 97.1% |
| Values | Daily Returns |
Iljin Display vs. Leaders Technology Investment
Performance |
| Timeline |
| Iljin Display |
| Leaders Technology |
Iljin Display and Leaders Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Leaders Technology
The main advantage of trading using opposite Iljin Display and Leaders Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Leaders Technology 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 Leaders Technology will offset losses from the drop in Leaders Technology's long position.| Iljin Display vs. Korea Information Communications | Iljin Display vs. Digital Power Communications | Iljin Display vs. Haitai Confectionery Foods | Iljin Display vs. Daishin Information Communications |
| Leaders Technology vs. KyungIn Electronics Co | Leaders Technology vs. Iljin Display | Leaders Technology vs. Cuckoo Electronics Co | Leaders Technology vs. FoodNamoo |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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