Correlation Between Iljin Display and KCC Engineering
Can any of the company-specific risk be diversified away by investing in both Iljin Display and KCC Engineering 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 KCC Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and KCC Engineering Construction, you can compare the effects of market volatilities on Iljin Display and KCC Engineering 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 KCC Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and KCC Engineering.
Diversification Opportunities for Iljin Display and KCC Engineering
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Iljin and KCC is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and KCC Engineering Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KCC Engineering Cons 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 KCC Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KCC Engineering Cons has no effect on the direction of Iljin Display i.e., Iljin Display and KCC Engineering go up and down completely randomly.
Pair Corralation between Iljin Display and KCC Engineering
Assuming the 90 days trading horizon Iljin Display is expected to generate 1.88 times more return on investment than KCC Engineering. However, Iljin Display is 1.88 times more volatile than KCC Engineering Construction. It trades about 0.0 of its potential returns per unit of risk. KCC Engineering Construction is currently generating about -0.05 per unit of risk. If you would invest 118,000 in Iljin Display on September 16, 2024 and sell it today you would lose (30,500) from holding Iljin Display or give up 25.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. KCC Engineering Construction
Performance |
| Timeline |
| Iljin Display |
| KCC Engineering Cons |
Iljin Display and KCC Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and KCC Engineering
The main advantage of trading using opposite Iljin Display and KCC Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, KCC Engineering 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 KCC Engineering will offset losses from the drop in KCC Engineering's long position.| Iljin Display vs. Sungmoon Electronics Co | Iljin Display vs. Solution Advanced Technology | Iljin Display vs. Busan Industrial Co | Iljin Display vs. Busan Ind |
| KCC Engineering vs. A Tech Solution Co | KCC Engineering vs. Iljin Display | KCC Engineering vs. LG Display Co | KCC Engineering vs. Echomarketing CoLtd |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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