Correlation Between Iljin Display and INtRON Biotechnology
Can any of the company-specific risk be diversified away by investing in both Iljin Display and INtRON Biotechnology 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 INtRON Biotechnology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and iNtRON Biotechnology, you can compare the effects of market volatilities on Iljin Display and INtRON Biotechnology 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 INtRON Biotechnology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and INtRON Biotechnology.
Diversification Opportunities for Iljin Display and INtRON Biotechnology
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iljin and INtRON is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and iNtRON Biotechnology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iNtRON Biotechnology 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 INtRON Biotechnology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iNtRON Biotechnology has no effect on the direction of Iljin Display i.e., Iljin Display and INtRON Biotechnology go up and down completely randomly.
Pair Corralation between Iljin Display and INtRON Biotechnology
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the INtRON Biotechnology. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Display is 1.36 times less risky than INtRON Biotechnology. The stock trades about -0.03 of its potential returns per unit of risk. The iNtRON Biotechnology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 743,000 in iNtRON Biotechnology on September 1, 2024 and sell it today you would lose (199,000) from holding iNtRON Biotechnology or give up 26.78% 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. iNtRON Biotechnology
Performance |
| Timeline |
| Iljin Display |
| iNtRON Biotechnology |
Iljin Display and INtRON Biotechnology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and INtRON Biotechnology
The main advantage of trading using opposite Iljin Display and INtRON Biotechnology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, INtRON Biotechnology 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 INtRON Biotechnology will offset losses from the drop in INtRON Biotechnology's long position.The idea behind Iljin Display and iNtRON Biotechnology 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.| INtRON Biotechnology vs. AptaBio Therapeutics | INtRON Biotechnology vs. KT Hitel | INtRON Biotechnology vs. SillaJen | INtRON Biotechnology vs. Cytogen |
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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