Correlation Between Iljin Display and Daewon Media
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Daewon Media 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 Daewon Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Daewon Media Co, you can compare the effects of market volatilities on Iljin Display and Daewon Media 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 Daewon Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Daewon Media.
Diversification Opportunities for Iljin Display and Daewon Media
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Iljin and Daewon is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Daewon Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewon Media 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 Daewon Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewon Media has no effect on the direction of Iljin Display i.e., Iljin Display and Daewon Media go up and down completely randomly.
Pair Corralation between Iljin Display and Daewon Media
Assuming the 90 days trading horizon Iljin Display is expected to generate 0.8 times more return on investment than Daewon Media. However, Iljin Display is 1.25 times less risky than Daewon Media. It trades about -0.25 of its potential returns per unit of risk. Daewon Media Co is currently generating about -0.25 per unit of risk. If you would invest 90,300 in Iljin Display on August 30, 2024 and sell it today you would lose (5,100) from holding Iljin Display or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Daewon Media Co
Performance |
| Timeline |
| Iljin Display |
| Daewon Media |
Iljin Display and Daewon Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Daewon Media
The main advantage of trading using opposite Iljin Display and Daewon Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Daewon Media 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 Daewon Media will offset losses from the drop in Daewon Media's long position.| Iljin Display vs. LG Display Co | Iljin Display vs. Organic Special Pet | Iljin Display vs. Display Tech Co | Iljin Display vs. ABOV Semiconductor Co |
| Daewon Media vs. Korea New Network | Daewon Media vs. Busan Industrial Co | Daewon Media vs. Busan Ind | Daewon Media vs. Shinhan WTI Futures |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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