Correlation Between Daesung Industrial and Ilji Technology
Can any of the company-specific risk be diversified away by investing in both Daesung Industrial 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 Daesung Industrial and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daesung Industrial Co and Ilji Technology Co, you can compare the effects of market volatilities on Daesung Industrial 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 Daesung Industrial with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daesung Industrial and Ilji Technology.
Diversification Opportunities for Daesung Industrial and Ilji Technology
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Daesung and Ilji is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Daesung Industrial 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 Daesung Industrial 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 Daesung Industrial 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 Daesung Industrial i.e., Daesung Industrial and Ilji Technology go up and down completely randomly.
Pair Corralation between Daesung Industrial and Ilji Technology
Assuming the 90 days trading horizon Daesung Industrial Co is expected to under-perform the Ilji Technology. But the stock apears to be less risky and, when comparing its historical volatility, Daesung Industrial Co is 1.15 times less risky than Ilji Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Ilji Technology Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 275,971 in Ilji Technology Co on October 28, 2024 and sell it today you would earn a total of 134,029 from holding Ilji Technology Co or generate 48.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daesung Industrial Co vs. Ilji Technology Co
Performance |
| Timeline |
| Daesung Industrial |
| Ilji Technology |
Daesung Industrial and Ilji Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daesung Industrial and Ilji Technology
The main advantage of trading using opposite Daesung Industrial and Ilji Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daesung Industrial 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.| Daesung Industrial vs. Atinum Investment Co | Daesung Industrial vs. Daejung Chemicals Metals | Daesung Industrial vs. Kbi Metal Co | Daesung Industrial vs. Heungkuk Metaltech CoLtd |
| Ilji Technology vs. Korea Investment Holdings | Ilji Technology vs. Daechang Steel Co | Ilji Technology vs. Husteel | Ilji Technology vs. SBI Investment KOREA |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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