Correlation Between Naver and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Naver 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 Naver and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naver and Ilji Technology Co, you can compare the effects of market volatilities on Naver 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 Naver with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naver and Ilji Technology.
Diversification Opportunities for Naver and Ilji Technology
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Naver and Ilji is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Naver and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and Naver 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 Naver 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 Naver i.e., Naver and Ilji Technology go up and down completely randomly.
Pair Corralation between Naver and Ilji Technology
Assuming the 90 days trading horizon Naver is expected to generate 0.82 times more return on investment than Ilji Technology. However, Naver is 1.23 times less risky than Ilji Technology. It trades about 0.43 of its potential returns per unit of risk. Ilji Technology Co is currently generating about -0.23 per unit of risk. If you would invest 17,570,000 in Naver on September 4, 2024 and sell it today you would earn a total of 2,780,000 from holding Naver or generate 15.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Naver vs. Ilji Technology Co
Performance |
| Timeline |
| Naver |
| Ilji Technology |
Naver and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Naver and Ilji Technology
The main advantage of trading using opposite Naver and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naver 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.| Naver vs. Nh Investment And | Naver vs. SBI Investment KOREA | Naver vs. Samyung Trading Co | Naver vs. Daelim Trading Co |
| Ilji Technology vs. Korea Real Estate | Ilji Technology vs. Busan Industrial Co | Ilji Technology vs. UNISEM Co | Ilji Technology vs. RPBio Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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