Correlation Between Iljin Display and Sangsin Energy
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Sangsin Energy 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 Sangsin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Sangsin Energy Display, you can compare the effects of market volatilities on Iljin Display and Sangsin Energy 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 Sangsin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Sangsin Energy.
Diversification Opportunities for Iljin Display and Sangsin Energy
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Iljin and Sangsin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Sangsin Energy Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sangsin Energy Display 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 Sangsin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sangsin Energy Display has no effect on the direction of Iljin Display i.e., Iljin Display and Sangsin Energy go up and down completely randomly.
Pair Corralation between Iljin Display and Sangsin Energy
Assuming the 90 days trading horizon Iljin Display is expected to generate 0.41 times more return on investment than Sangsin Energy. However, Iljin Display is 2.43 times less risky than Sangsin Energy. It trades about -0.27 of its potential returns per unit of risk. Sangsin Energy Display is currently generating about -0.41 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 | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Sangsin Energy Display
Performance |
| Timeline |
| Iljin Display |
| Sangsin Energy Display |
Iljin Display and Sangsin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Sangsin Energy
The main advantage of trading using opposite Iljin Display and Sangsin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Sangsin Energy 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 Sangsin Energy will offset losses from the drop in Sangsin Energy'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 |
| Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Samsung Electronics Co | Sangsin Energy vs. Hyundai Motor Co | Sangsin Energy vs. Hyundai Motor |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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