Correlation Between Jeju Air and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Jeju Air and Ilji Technology 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 Jeju Air and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jeju Air Co and Ilji Technology Co, you can compare the effects of market volatilities on Jeju Air and Ilji Technology 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 Jeju Air with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jeju Air and Ilji Technology.
Diversification Opportunities for Jeju Air and Ilji Technology
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Jeju and Ilji is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jeju Air Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and Jeju Air 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 Jeju Air Co are associated (or correlated) with Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of Jeju Air i.e., Jeju Air and Ilji Technology go up and down completely randomly.
Pair Corralation between Jeju Air and Ilji Technology
Assuming the 90 days trading horizon Jeju Air Co is expected to under-perform the Ilji Technology. In addition to that, Jeju Air is 1.86 times more volatile than Ilji Technology Co. It trades about -0.23 of its total potential returns per unit of risk. Ilji Technology Co is currently generating about 0.48 per unit of volatility. If you would invest 345,707 in Ilji Technology Co on October 21, 2024 and sell it today you would earn a total of 46,793 from holding Ilji Technology Co or generate 13.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jeju Air Co vs. Ilji Technology Co
Performance |
| Timeline |
| Jeju Air |
| Ilji Technology |
Jeju Air and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jeju Air and Ilji Technology
The main advantage of trading using opposite Jeju Air and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jeju Air position performs unexpectedly, Ilji Technology 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 Ilji Technology will offset losses from the drop in Ilji Technology's long position.| Jeju Air vs. Hyundai Industrial Co | Jeju Air vs. Asiana Airlines | Jeju Air vs. Ilji Technology Co | Jeju Air vs. DRB Industrial Co |
| Ilji Technology vs. Samsung Card Co | Ilji Technology vs. EBEST Investment Securities | Ilji Technology vs. Koh Young Technology | Ilji Technology vs. Hansol Chemica |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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