Correlation Between SillaJen and DIO
Can any of the company-specific risk be diversified away by investing in both SillaJen and DIO 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 SillaJen and DIO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SillaJen and DIO Corporation, you can compare the effects of market volatilities on SillaJen and DIO 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 SillaJen with a short position of DIO. Check out your portfolio center. Please also check ongoing floating volatility patterns of SillaJen and DIO.
Diversification Opportunities for SillaJen and DIO
Significant diversification
The 3 months correlation between SillaJen and DIO is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding SillaJen and DIO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIO Corporation and SillaJen 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 SillaJen are associated (or correlated) with DIO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIO Corporation has no effect on the direction of SillaJen i.e., SillaJen and DIO go up and down completely randomly.
Pair Corralation between SillaJen and DIO
Assuming the 90 days trading horizon SillaJen is expected to generate 1.88 times more return on investment than DIO. However, SillaJen is 1.88 times more volatile than DIO Corporation. It trades about 0.05 of its potential returns per unit of risk. DIO Corporation is currently generating about 0.02 per unit of risk. If you would invest 276,500 in SillaJen on September 5, 2024 and sell it today you would earn a total of 12,500 from holding SillaJen or generate 4.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SillaJen vs. DIO Corp.
Performance |
| Timeline |
| SillaJen |
| DIO Corporation |
SillaJen and DIO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SillaJen and DIO
The main advantage of trading using opposite SillaJen and DIO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SillaJen position performs unexpectedly, DIO 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 DIO will offset losses from the drop in DIO's long position.| SillaJen vs. Hanmi Semiconductor Co | SillaJen vs. Koh Young Technology | SillaJen vs. Chorokbaem Healthcare Co | SillaJen vs. Dongil Technology |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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