Correlation Between Iljin Display and Korea Information
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Korea 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 Korea 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 Korea Information Communications, you can compare the effects of market volatilities on Iljin Display and Korea 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Korea Information.
Diversification Opportunities for Iljin Display and Korea Information
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Iljin and Korea is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Iljin Display i.e., Iljin Display and Korea Information go up and down completely randomly.
Pair Corralation between Iljin Display and Korea Information
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the Korea Information. In addition to that, Iljin Display is 1.75 times more volatile than Korea Information Communications. It trades about -0.02 of its total potential returns per unit of risk. Korea Information Communications is currently generating about -0.03 per unit of volatility. If you would invest 900,000 in Korea Information Communications on November 1, 2024 and sell it today you would lose (104,000) from holding Korea Information Communications or give up 11.56% 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. Korea Information Communicatio
Performance |
| Timeline |
| Iljin Display |
| Korea Information |
Iljin Display and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Korea Information
The main advantage of trading using opposite Iljin Display and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Korea 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 Korea Information will offset losses from the drop in Korea Information's long position.| Iljin Display vs. SM Entertainment Co | Iljin Display vs. ChipsMedia | Iljin Display vs. INNOX Advanced Materials | Iljin Display vs. Next Entertainment World |
| Korea Information vs. DataSolution | Korea Information vs. TS Investment Corp | Korea Information vs. Korea Information Engineering | Korea Information vs. Woori Technology Investment |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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