Correlation Between Tway Air and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Tway Air 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 Tway Air and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tway Air Co and Iljin Display, you can compare the effects of market volatilities on Tway Air 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 Tway Air with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Iljin Display.
Diversification Opportunities for Tway Air and Iljin Display
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tway and Iljin is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Tway 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 Tway Air 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 Tway Air i.e., Tway Air and Iljin Display go up and down completely randomly.
Pair Corralation between Tway Air and Iljin Display
Assuming the 90 days trading horizon Tway Air Co is expected to generate 3.24 times more return on investment than Iljin Display. However, Tway Air is 3.24 times more volatile than Iljin Display. It trades about -0.08 of its potential returns per unit of risk. Iljin Display is currently generating about -0.29 per unit of risk. If you would invest 308,500 in Tway Air Co on August 25, 2024 and sell it today you would lose (20,500) from holding Tway Air Co or give up 6.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Tway Air Co vs. Iljin Display
Performance |
| Timeline |
| Tway Air |
| Iljin Display |
Tway Air and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Iljin Display
The main advantage of trading using opposite Tway Air and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air 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.| Tway Air vs. Jin Air Co | Tway Air vs. Busan Industrial Co | Tway Air vs. Busan Ind | Tway Air vs. Mirae Asset Daewoo |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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