Correlation Between Dongbang Ship and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Dongbang Ship 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 Dongbang Ship and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongbang Ship Machinery and Iljin Display, you can compare the effects of market volatilities on Dongbang Ship 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 Dongbang Ship with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongbang Ship and Iljin Display.
Diversification Opportunities for Dongbang Ship and Iljin Display
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dongbang and Iljin is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Dongbang Ship Machinery and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Dongbang Ship 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 Dongbang Ship Machinery 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 Dongbang Ship i.e., Dongbang Ship and Iljin Display go up and down completely randomly.
Pair Corralation between Dongbang Ship and Iljin Display
Assuming the 90 days trading horizon Dongbang Ship Machinery is expected to generate 1.61 times more return on investment than Iljin Display. However, Dongbang Ship is 1.61 times more volatile than Iljin Display. It trades about 0.12 of its potential returns per unit of risk. Iljin Display is currently generating about 0.05 per unit of risk. If you would invest 281,000 in Dongbang Ship Machinery on October 30, 2024 and sell it today you would earn a total of 41,000 from holding Dongbang Ship Machinery or generate 14.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongbang Ship Machinery vs. Iljin Display
Performance |
| Timeline |
| Dongbang Ship Machinery |
| Iljin Display |
Dongbang Ship and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongbang Ship and Iljin Display
The main advantage of trading using opposite Dongbang Ship and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongbang Ship 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.| Dongbang Ship vs. Hanjin Transportation Co | Dongbang Ship vs. Hana Financial | Dongbang Ship vs. Incar Financial Service | Dongbang Ship vs. Dongbang Transport Logistics |
| Iljin Display vs. Daishin Information Communications | Iljin Display vs. Mobileleader CoLtd | Iljin Display vs. Jeong Moon Information | Iljin Display vs. Mgame Corp |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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