Correlation Between Insung Information and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Insung Information and Iljin Display 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 Insung Information and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Iljin Display, you can compare the effects of market volatilities on Insung Information and Iljin Display 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 Insung Information with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Iljin Display.
Diversification Opportunities for Insung Information and Iljin Display
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insung and Iljin is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Insung Information 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 Insung Information Co are associated (or correlated) with Iljin Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iljin Display has no effect on the direction of Insung Information i.e., Insung Information and Iljin Display go up and down completely randomly.
Pair Corralation between Insung Information and Iljin Display
Assuming the 90 days trading horizon Insung Information Co is expected to under-perform the Iljin Display. In addition to that, Insung Information is 1.12 times more volatile than Iljin Display. It trades about -0.16 of its total potential returns per unit of risk. Iljin Display is currently generating about 0.01 per unit of volatility. If you would invest 86,500 in Iljin Display on November 6, 2024 and sell it today you would earn a total of 0.00 from holding Iljin Display or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. Iljin Display
Performance |
| Timeline |
| Insung Information |
| Iljin Display |
Insung Information and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Iljin Display
The main advantage of trading using opposite Insung Information and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information position performs unexpectedly, Iljin Display 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 Iljin Display will offset losses from the drop in Iljin Display's long position.| Insung Information vs. Samsung Electronics Co | Insung Information vs. Samsung Electronics Co | Insung Information vs. Hyundai Motor Co | Insung Information vs. Hyundai Motor |
| Iljin Display vs. CU Medical Systems | Iljin Display vs. E Investment Development | Iljin Display vs. Alton Sports CoLtd | Iljin Display vs. PJ Metal 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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