Correlation Between Iljin Display and Mobile Appliance

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Can any of the company-specific risk be diversified away by investing in both Iljin Display and Mobile Appliance 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 Mobile Appliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Mobile Appliance, you can compare the effects of market volatilities on Iljin Display and Mobile Appliance 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 Mobile Appliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Mobile Appliance.

Diversification Opportunities for Iljin Display and Mobile Appliance

IljinMobileDiversified AwayIljinMobileDiversified Away100%
0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Iljin and Mobile is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Mobile Appliance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mobile Appliance 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 Mobile Appliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mobile Appliance has no effect on the direction of Iljin Display i.e., Iljin Display and Mobile Appliance go up and down completely randomly.

Pair Corralation between Iljin Display and Mobile Appliance

Assuming the 90 days trading horizon Iljin Display is expected to generate 0.55 times more return on investment than Mobile Appliance. However, Iljin Display is 1.83 times less risky than Mobile Appliance. It trades about -0.05 of its potential returns per unit of risk. Mobile Appliance is currently generating about -0.13 per unit of risk. If you would invest  83,000  in Iljin Display on September 22, 2024 and sell it today you would lose (2,200) from holding Iljin Display or give up 2.65% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Iljin Display  vs.  Mobile Appliance

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -25-20-15-10-505
JavaScript chart by amCharts 3.21.15020760 087260
       Timeline  
Iljin Display 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Iljin Display has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec8008509009501,000
Mobile Appliance 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Mobile Appliance has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1,8002,0002,2002,4002,6002,800

Iljin Display and Mobile Appliance Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.44-1.91-1.38-0.85-0.320.170.71.231.762.29 0.050.100.150.20
JavaScript chart by amCharts 3.21.15020760 087260
       Returns  

Pair Trading with Iljin Display and Mobile Appliance

The main advantage of trading using opposite Iljin Display and Mobile Appliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Mobile Appliance 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 Mobile Appliance will offset losses from the drop in Mobile Appliance's long position.
The idea behind Iljin Display and Mobile Appliance 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.
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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 CEOs Directory module to screen CEOs from public companies around the world.

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