Correlation Between Iljin Display and Hyundai Green
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Hyundai Green 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 Hyundai Green into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Hyundai Green Food, you can compare the effects of market volatilities on Iljin Display and Hyundai Green 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 Hyundai Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Hyundai Green.
Diversification Opportunities for Iljin Display and Hyundai Green
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Iljin and Hyundai is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Hyundai Green Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Green Food 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 Hyundai Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Green Food has no effect on the direction of Iljin Display i.e., Iljin Display and Hyundai Green go up and down completely randomly.
Pair Corralation between Iljin Display and Hyundai Green
Assuming the 90 days trading horizon Iljin Display is expected to under-perform the Hyundai Green. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Display is 1.61 times less risky than Hyundai Green. The stock trades about -0.19 of its potential returns per unit of risk. The Hyundai Green Food is currently generating about 0.45 of returns per unit of risk over similar time horizon. If you would invest 1,167,000 in Hyundai Green Food on September 1, 2024 and sell it today you would earn a total of 208,000 from holding Hyundai Green Food or generate 17.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iljin Display vs. Hyundai Green Food
Performance |
| Timeline |
| Iljin Display |
| Hyundai Green Food |
Iljin Display and Hyundai Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iljin Display and Hyundai Green
The main advantage of trading using opposite Iljin Display and Hyundai Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Hyundai Green 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 Hyundai Green will offset losses from the drop in Hyundai Green's long position.| Iljin Display vs. Automobile Pc | Iljin Display vs. Wonil Special Steel | Iljin Display vs. Korea Information Communications | Iljin Display vs. Hwangkum Steel Technology |
| Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. Samsung Electronics Co | Hyundai Green vs. LG Energy Solution | Hyundai Green vs. SK Hynix |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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