Correlation Between BGF Retail and Iljin Display
Can any of the company-specific risk be diversified away by investing in both BGF Retail 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 BGF Retail and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BGF Retail Co and Iljin Display, you can compare the effects of market volatilities on BGF Retail 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 BGF Retail with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of BGF Retail and Iljin Display.
Diversification Opportunities for BGF Retail and Iljin Display
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BGF and Iljin is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding BGF Retail Co and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and BGF Retail 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 BGF Retail 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 BGF Retail i.e., BGF Retail and Iljin Display go up and down completely randomly.
Pair Corralation between BGF Retail and Iljin Display
Assuming the 90 days trading horizon BGF Retail Co is expected to generate 2.22 times more return on investment than Iljin Display. However, BGF Retail is 2.22 times more volatile than Iljin Display. It trades about -0.08 of its potential returns per unit of risk. Iljin Display is currently generating about -0.27 per unit of risk. If you would invest 11,200,000 in BGF Retail Co on August 29, 2024 and sell it today you would lose (500,000) from holding BGF Retail Co or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BGF Retail Co vs. Iljin Display
Performance |
| Timeline |
| BGF Retail |
| Iljin Display |
BGF Retail and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BGF Retail and Iljin Display
The main advantage of trading using opposite BGF Retail and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BGF Retail 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.| BGF Retail vs. AptaBio Therapeutics | BGF Retail vs. Daewoo SBI SPAC | BGF Retail vs. Dream Security co | BGF Retail vs. Microfriend |
| Iljin Display vs. Kukdo Chemical Co | Iljin Display vs. SK Chemicals Co | Iljin Display vs. Youl Chon Chemical | Iljin Display vs. Korea Petro Chemical |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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