Correlation Between N2Tech and Iljin Display
Can any of the company-specific risk be diversified away by investing in both N2Tech 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 N2Tech and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between N2Tech Co and Iljin Display, you can compare the effects of market volatilities on N2Tech 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 N2Tech with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of N2Tech and Iljin Display.
Diversification Opportunities for N2Tech and Iljin Display
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between N2Tech and Iljin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding N2Tech Co and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and N2Tech 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 N2Tech 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 N2Tech i.e., N2Tech and Iljin Display go up and down completely randomly.
Pair Corralation between N2Tech and Iljin Display
Assuming the 90 days trading horizon N2Tech is expected to generate 3.51 times less return on investment than Iljin Display. But when comparing it to its historical volatility, N2Tech Co is 1.98 times less risky than Iljin Display. It trades about 0.04 of its potential returns per unit of risk. Iljin Display is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 87,500 in Iljin Display on October 14, 2024 and sell it today you would earn a total of 2,700 from holding Iljin Display or generate 3.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
N2Tech Co vs. Iljin Display
Performance |
| Timeline |
| N2Tech |
| Iljin Display |
N2Tech and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with N2Tech and Iljin Display
The main advantage of trading using opposite N2Tech and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N2Tech 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.| N2Tech vs. Iljin Display | N2Tech vs. Chorokbaem Healthcare Co | N2Tech vs. Infinitt Healthcare Co | N2Tech vs. INFINITT Healthcare Co |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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