Correlation Between Iljin Display and CHEMTRONICSCOLtd
Can any of the company-specific risk be diversified away by investing in both Iljin Display and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and CHEMTRONICSCOLtd, you can compare the effects of market volatilities on Iljin Display and CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and CHEMTRONICSCOLtd.
Diversification Opportunities for Iljin Display and CHEMTRONICSCOLtd
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Iljin and CHEMTRONICSCOLtd is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and CHEMTRONICSCOLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHEMTRONICSCOLtd has no effect on the direction of Iljin Display i.e., Iljin Display and CHEMTRONICSCOLtd go up and down completely randomly.
Pair Corralation between Iljin Display and CHEMTRONICSCOLtd
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the CHEMTRONICSCOLtd. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Display is 1.08 times less risky than CHEMTRONICSCOLtd. The stock trades about -0.01 of its potential returns per unit of risk. The CHEMTRONICSCOLtd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,539,225 in CHEMTRONICSCOLtd on September 3, 2024 and sell it today you would earn a total of 6,775 from holding CHEMTRONICSCOLtd or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. CHEMTRONICSCOLtd
Performance |
| Timeline |
| Iljin Display |
| CHEMTRONICSCOLtd |
Iljin Display and CHEMTRONICSCOLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and CHEMTRONICSCOLtd
The main advantage of trading using opposite Iljin Display and CHEMTRONICSCOLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, CHEMTRONICSCOLtd 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 CHEMTRONICSCOLtd will offset losses from the drop in CHEMTRONICSCOLtd's long position.| Iljin Display vs. Hankook Steel Co | Iljin Display vs. Genie Music | Iljin Display vs. Korea Shipbuilding Offshore | Iljin Display vs. Hanil Iron Steel |
| CHEMTRONICSCOLtd vs. Samyung Trading Co | CHEMTRONICSCOLtd vs. Samyoung Electronics Co | CHEMTRONICSCOLtd vs. DB Financial Investment | CHEMTRONICSCOLtd vs. Golden Bridge 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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