Correlation Between EBEST Investment and Iljin Display
Can any of the company-specific risk be diversified away by investing in both EBEST Investment 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 EBEST Investment and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EBEST Investment Securities and Iljin Display, you can compare the effects of market volatilities on EBEST Investment 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 EBEST Investment with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of EBEST Investment and Iljin Display.
Diversification Opportunities for EBEST Investment and Iljin Display
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between EBEST and Iljin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding EBEST Investment Securities and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and EBEST Investment 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 EBEST Investment Securities 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 EBEST Investment i.e., EBEST Investment and Iljin Display go up and down completely randomly.
Pair Corralation between EBEST Investment and Iljin Display
Assuming the 90 days trading horizon EBEST Investment Securities is expected to generate 0.59 times more return on investment than Iljin Display. However, EBEST Investment Securities is 1.7 times less risky than Iljin Display. It trades about -0.02 of its potential returns per unit of risk. Iljin Display is currently generating about -0.02 per unit of risk. If you would invest 520,141 in EBEST Investment Securities on August 27, 2024 and sell it today you would lose (104,141) from holding EBEST Investment Securities or give up 20.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
EBEST Investment Securities vs. Iljin Display
Performance |
| Timeline |
| EBEST Investment Sec |
| Iljin Display |
EBEST Investment and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EBEST Investment and Iljin Display
The main advantage of trading using opposite EBEST Investment and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EBEST Investment 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.| EBEST Investment vs. Hana Materials | EBEST Investment vs. NewFlex Technology Co | EBEST Investment vs. EV Advanced Material | EBEST Investment vs. Lotte Energy Materials |
| Iljin Display vs. EBEST Investment Securities | Iljin Display vs. E Investment Development | Iljin Display vs. Dongkuk Steel Mill | Iljin Display vs. Stic Investments |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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