Correlation Between Iljin Display and Daishin Information
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Daishin 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 Daishin 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 Daishin Information Communications, you can compare the effects of market volatilities on Iljin Display and Daishin 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 Daishin Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Daishin Information.
Diversification Opportunities for Iljin Display and Daishin Information
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iljin and Daishin is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Daishin Information Communicat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daishin 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 Daishin Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daishin Information has no effect on the direction of Iljin Display i.e., Iljin Display and Daishin Information go up and down completely randomly.
Pair Corralation between Iljin Display and Daishin Information
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the Daishin Information. In addition to that, Iljin Display is 1.71 times more volatile than Daishin Information Communications. It trades about -0.03 of its total potential returns per unit of risk. Daishin Information Communications is currently generating about -0.04 per unit of volatility. If you would invest 113,384 in Daishin Information Communications on September 1, 2024 and sell it today you would lose (27,484) from holding Daishin Information Communications or give up 24.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Daishin Information Communicat
Performance |
| Timeline |
| Iljin Display |
| Daishin Information |
Iljin Display and Daishin Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Daishin Information
The main advantage of trading using opposite Iljin Display and Daishin Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Daishin 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 Daishin Information will offset losses from the drop in Daishin Information's long position.The idea behind Iljin Display and Daishin Information Communications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Daishin Information vs. Settlebank | Daishin Information vs. Busan Industrial Co | Daishin Information vs. Busan Ind | Daishin Information vs. Mirae Asset Daewoo |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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