Correlation Between Phoenix Materials and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Phoenix Materials 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 Phoenix Materials and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phoenix Materials Co and Iljin Display, you can compare the effects of market volatilities on Phoenix Materials 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 Phoenix Materials with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phoenix Materials and Iljin Display.
Diversification Opportunities for Phoenix Materials and Iljin Display
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Phoenix and Iljin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Phoenix Materials Co and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Phoenix Materials 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 Phoenix Materials 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 Phoenix Materials i.e., Phoenix Materials and Iljin Display go up and down completely randomly.
Pair Corralation between Phoenix Materials and Iljin Display
Assuming the 90 days trading horizon Phoenix Materials Co is expected to generate 2.95 times more return on investment than Iljin Display. However, Phoenix Materials is 2.95 times more volatile than Iljin Display. It trades about -0.03 of its potential returns per unit of risk. Iljin Display is currently generating about -0.18 per unit of risk. If you would invest 99,900 in Phoenix Materials Co on September 2, 2024 and sell it today you would lose (30,400) from holding Phoenix Materials Co or give up 30.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phoenix Materials Co vs. Iljin Display
Performance |
| Timeline |
| Phoenix Materials |
| Iljin Display |
Phoenix Materials and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phoenix Materials and Iljin Display
The main advantage of trading using opposite Phoenix Materials and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phoenix Materials 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.| Phoenix Materials vs. Dongsin Engineering Construction | Phoenix Materials vs. Doosan Fuel Cell | Phoenix Materials vs. Daishin Balance 1 | Phoenix Materials vs. Total Soft Bank |
| Iljin Display vs. Korea Investment Holdings | Iljin Display vs. Nh Investment And | Iljin Display vs. Golden Bridge Investment | Iljin Display vs. Woori Technology Investment |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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