Correlation Between Mgame Corp and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Mgame Corp 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 Mgame Corp and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mgame Corp and Iljin Display, you can compare the effects of market volatilities on Mgame Corp 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 Mgame Corp with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mgame Corp and Iljin Display.
Diversification Opportunities for Mgame Corp and Iljin Display
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mgame and Iljin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mgame Corp and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Mgame Corp 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 Mgame Corp 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 Mgame Corp i.e., Mgame Corp and Iljin Display go up and down completely randomly.
Pair Corralation between Mgame Corp and Iljin Display
Assuming the 90 days trading horizon Mgame Corp is expected to under-perform the Iljin Display. But the stock apears to be less risky and, when comparing its historical volatility, Mgame Corp is 1.29 times less risky than Iljin Display. The stock trades about -0.2 of its potential returns per unit of risk. The Iljin Display is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 86,500 in Iljin Display on November 7, 2024 and sell it today you would earn a total of 1,800 from holding Iljin Display or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Mgame Corp vs. Iljin Display
Performance |
| Timeline |
| Mgame Corp |
| Iljin Display |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Mgame Corp and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mgame Corp and Iljin Display
The main advantage of trading using opposite Mgame Corp and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mgame Corp 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.| Mgame Corp vs. Hana Financial | Mgame Corp vs. Shinhan Financial Group | Mgame Corp vs. Namhae Chemical | Mgame Corp vs. Aekyung Petrochemical Co |
| Iljin Display vs. KMH Hitech Co | Iljin Display vs. Orbitech Co | Iljin Display vs. Dongwoon Anatech Co | Iljin Display vs. Dongbang Transport Logistics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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