Correlation Between CU Medical and Iljin Display
Can any of the company-specific risk be diversified away by investing in both CU Medical 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 CU Medical and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Medical Systems and Iljin Display, you can compare the effects of market volatilities on CU Medical 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 CU Medical with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Medical and Iljin Display.
Diversification Opportunities for CU Medical and Iljin Display
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 115480 and Iljin is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding CU Medical Systems and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and CU Medical 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 CU Medical Systems 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 CU Medical i.e., CU Medical and Iljin Display go up and down completely randomly.
Pair Corralation between CU Medical and Iljin Display
Assuming the 90 days trading horizon CU Medical Systems is expected to under-perform the Iljin Display. But the stock apears to be less risky and, when comparing its historical volatility, CU Medical Systems is 1.93 times less risky than Iljin Display. The stock trades about -0.08 of its potential returns per unit of risk. The Iljin Display is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 115,100 in Iljin Display on August 27, 2024 and sell it today you would lose (30,800) from holding Iljin Display or give up 26.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Medical Systems vs. Iljin Display
Performance |
| Timeline |
| CU Medical Systems |
| Iljin Display |
CU Medical and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Medical and Iljin Display
The main advantage of trading using opposite CU Medical and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Medical 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.| CU Medical vs. Medy Tox | CU Medical vs. Busan Industrial Co | CU Medical vs. Busan Ind | CU Medical vs. Mirae Asset Daewoo |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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