Correlation Between Iljin Display and Daou Technology
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Daou 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 Daou 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 Daou Technology, you can compare the effects of market volatilities on Iljin Display and Daou 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 Daou Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Daou Technology.
Diversification Opportunities for Iljin Display and Daou Technology
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Iljin and Daou is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Daou Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daou 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 Daou Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daou Technology has no effect on the direction of Iljin Display i.e., Iljin Display and Daou Technology go up and down completely randomly.
Pair Corralation between Iljin Display and Daou Technology
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the Daou Technology. In addition to that, Iljin Display is 1.62 times more volatile than Daou Technology. It trades about -0.03 of its total potential returns per unit of risk. Daou Technology is currently generating about 0.01 per unit of volatility. If you would invest 1,798,816 in Daou Technology on September 1, 2024 and sell it today you would earn a total of 28,184 from holding Daou Technology or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Daou Technology
Performance |
| Timeline |
| Iljin Display |
| Daou Technology |
Iljin Display and Daou Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Daou Technology
The main advantage of trading using opposite Iljin Display and Daou Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Daou 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 Daou Technology will offset losses from the drop in Daou Technology's long position.The idea behind Iljin Display and Daou Technology 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.| Daou Technology vs. Kaonmedia Co | Daou Technology vs. JYP Entertainment Corp | Daou Technology vs. DC Media Co | Daou Technology vs. Raontech |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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