Correlation Between Iljin Display and BGF Retail
Can any of the company-specific risk be diversified away by investing in both Iljin Display and BGF Retail 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 BGF Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and BGF Retail Co, you can compare the effects of market volatilities on Iljin Display and BGF Retail 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 BGF Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and BGF Retail.
Diversification Opportunities for Iljin Display and BGF Retail
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Iljin and BGF is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and BGF Retail Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGF Retail 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 BGF Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGF Retail has no effect on the direction of Iljin Display i.e., Iljin Display and BGF Retail go up and down completely randomly.
Pair Corralation between Iljin Display and BGF Retail
Assuming the 90 days trading horizon Iljin Display is expected to generate 1.66 times more return on investment than BGF Retail. However, Iljin Display is 1.66 times more volatile than BGF Retail Co. It trades about -0.01 of its potential returns per unit of risk. BGF Retail Co is currently generating about -0.05 per unit of risk. If you would invest 124,700 in Iljin Display on November 4, 2024 and sell it today you would lose (36,400) from holding Iljin Display or give up 29.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. BGF Retail Co
Performance |
| Timeline |
| Iljin Display |
| BGF Retail |
Iljin Display and BGF Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and BGF Retail
The main advantage of trading using opposite Iljin Display and BGF Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, BGF Retail 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 BGF Retail will offset losses from the drop in BGF Retail's long position.| Iljin Display vs. Daechang Steel Co | Iljin Display vs. Hankuk Steel Wire | Iljin Display vs. Seah Steel Corp | Iljin Display vs. Haitai Confectionery Foods |
| BGF Retail vs. Hyundai BNG Steel | BGF Retail vs. Samhyun Steel Co | BGF Retail vs. Cuckoo Homesys Co | BGF Retail vs. Moonbae Steel |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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