Correlation Between Iljin Display and Nasmedia
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Nasmedia 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 Nasmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Nasmedia Co, you can compare the effects of market volatilities on Iljin Display and Nasmedia 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 Nasmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Nasmedia.
Diversification Opportunities for Iljin Display and Nasmedia
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Iljin and Nasmedia is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Nasmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nasmedia 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 Nasmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nasmedia has no effect on the direction of Iljin Display i.e., Iljin Display and Nasmedia go up and down completely randomly.
Pair Corralation between Iljin Display and Nasmedia
Assuming the 90 days trading horizon Iljin Display is expected to generate 0.67 times more return on investment than Nasmedia. However, Iljin Display is 1.49 times less risky than Nasmedia. It trades about -0.2 of its potential returns per unit of risk. Nasmedia Co is currently generating about -0.17 per unit of risk. If you would invest 90,000 in Iljin Display on September 3, 2024 and sell it today you would lose (4,100) from holding Iljin Display or give up 4.56% 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. Nasmedia Co
Performance |
| Timeline |
| Iljin Display |
| Nasmedia |
Iljin Display and Nasmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Nasmedia
The main advantage of trading using opposite Iljin Display and Nasmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Nasmedia 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 Nasmedia will offset losses from the drop in Nasmedia'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 |
| Nasmedia vs. Korea New Network | Nasmedia vs. ICD Co | Nasmedia vs. DYPNF CoLtd | Nasmedia vs. Busan Industrial Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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