Correlation Between Iljin Display and Display Tech
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Display Tech 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 Display Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Display Tech Co, you can compare the effects of market volatilities on Iljin Display and Display Tech 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 Display Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Display Tech.
Diversification Opportunities for Iljin Display and Display Tech
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Iljin and Display is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Display Tech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Display Tech 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 Display Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Display Tech has no effect on the direction of Iljin Display i.e., Iljin Display and Display Tech go up and down completely randomly.
Pair Corralation between Iljin Display and Display Tech
Assuming the 90 days trading horizon Iljin Display is expected to generate 0.84 times more return on investment than Display Tech. However, Iljin Display is 1.18 times less risky than Display Tech. It trades about -0.27 of its potential returns per unit of risk. Display Tech Co is currently generating about -0.32 per unit of risk. If you would invest 91,100 in Iljin Display on August 29, 2024 and sell it today you would lose (5,400) from holding Iljin Display or give up 5.93% 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. Display Tech Co
Performance |
| Timeline |
| Iljin Display |
| Display Tech |
Iljin Display and Display Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Display Tech
The main advantage of trading using opposite Iljin Display and Display Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Display Tech 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 Display Tech will offset losses from the drop in Display Tech's long position.| Iljin Display vs. Kukdo Chemical Co | Iljin Display vs. SK Chemicals Co | Iljin Display vs. Youl Chon Chemical | Iljin Display vs. Korea Petro Chemical |
| Display Tech vs. AptaBio Therapeutics | Display Tech vs. Daewoo SBI SPAC | Display Tech vs. Dream Security co | Display Tech vs. Microfriend |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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