Correlation Between Asia Technology and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Asia Technology 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 Asia Technology and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asia Technology Co and Iljin Display, you can compare the effects of market volatilities on Asia Technology 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 Asia Technology with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asia Technology and Iljin Display.
Diversification Opportunities for Asia Technology and Iljin Display
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asia and Iljin is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Asia Technology Co and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Asia Technology 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 Asia Technology 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 Asia Technology i.e., Asia Technology and Iljin Display go up and down completely randomly.
Pair Corralation between Asia Technology and Iljin Display
Assuming the 90 days trading horizon Asia Technology Co is expected to generate 2.17 times more return on investment than Iljin Display. However, Asia Technology is 2.17 times more volatile than Iljin Display. It trades about 0.06 of its potential returns per unit of risk. Iljin Display is currently generating about -0.27 per unit of risk. If you would invest 220,000 in Asia Technology Co on August 28, 2024 and sell it today you would earn a total of 5,000 from holding Asia Technology Co or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asia Technology Co vs. Iljin Display
Performance |
| Timeline |
| Asia Technology |
| Iljin Display |
Asia Technology and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asia Technology and Iljin Display
The main advantage of trading using opposite Asia Technology and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asia Technology 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.| Asia Technology vs. FNC Entertainment Co | Asia Technology vs. SM Entertainment Co | Asia Technology vs. Hanwha InvestmentSecurities Co | Asia Technology vs. SBI Investment KOREA |
| Iljin Display vs. Kukdo Chemical Co | Iljin Display vs. SK Chemicals Co | Iljin Display vs. Youl Chon Chemical | Iljin Display vs. Korea Petro Chemical |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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