Correlation Between INtRON Biotechnology and Iljin Display
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology 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 INtRON Biotechnology and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and Iljin Display, you can compare the effects of market volatilities on INtRON Biotechnology 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 INtRON Biotechnology with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and Iljin Display.
Diversification Opportunities for INtRON Biotechnology and Iljin Display
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INtRON and Iljin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and INtRON Biotechnology 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 iNtRON Biotechnology 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 INtRON Biotechnology i.e., INtRON Biotechnology and Iljin Display go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and Iljin Display
Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 1.36 times more return on investment than Iljin Display. However, INtRON Biotechnology is 1.36 times more volatile than Iljin Display. It trades about 0.0 of its potential returns per unit of risk. Iljin Display is currently generating about -0.03 per unit of risk. If you would invest 743,000 in iNtRON Biotechnology on September 1, 2024 and sell it today you would lose (199,000) from holding iNtRON Biotechnology or give up 26.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
iNtRON Biotechnology vs. Iljin Display
Performance |
| Timeline |
| iNtRON Biotechnology |
| Iljin Display |
INtRON Biotechnology and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and Iljin Display
The main advantage of trading using opposite INtRON Biotechnology and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology 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.| INtRON Biotechnology vs. AptaBio Therapeutics | INtRON Biotechnology vs. KT Hitel | INtRON Biotechnology vs. SillaJen | INtRON Biotechnology vs. Cytogen |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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