Correlation Between COWAY and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both COWAY and Ilji Technology 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 COWAY and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COWAY Co and Ilji Technology Co, you can compare the effects of market volatilities on COWAY and Ilji Technology 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 COWAY with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of COWAY and Ilji Technology.
Diversification Opportunities for COWAY and Ilji Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between COWAY and Ilji is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding COWAY Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and COWAY 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 COWAY Co are associated (or correlated) with Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of COWAY i.e., COWAY and Ilji Technology go up and down completely randomly.
Pair Corralation between COWAY and Ilji Technology
Assuming the 90 days trading horizon COWAY Co is expected to under-perform the Ilji Technology. But the stock apears to be less risky and, when comparing its historical volatility, COWAY Co is 1.36 times less risky than Ilji Technology. The stock trades about -0.17 of its potential returns per unit of risk. The Ilji Technology Co is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 412,500 in Ilji Technology Co on August 24, 2024 and sell it today you would lose (13,500) from holding Ilji Technology Co or give up 3.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COWAY Co vs. Ilji Technology Co
Performance |
| Timeline |
| COWAY |
| Ilji Technology |
COWAY and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COWAY and Ilji Technology
The main advantage of trading using opposite COWAY and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COWAY position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology's long position.| COWAY vs. Ilji Technology Co | COWAY vs. HB Technology TD | COWAY vs. Visang Education | COWAY vs. Dong A Steel Technology |
| Ilji Technology vs. Busan Industrial Co | Ilji Technology vs. Busan Ind | Ilji Technology vs. Mirae Asset Daewoo | Ilji Technology vs. UNISEM 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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