Correlation Between Seah Steel and Iljin Display
Can any of the company-specific risk be diversified away by investing in both Seah Steel 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 Seah Steel and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seah Steel Corp and Iljin Display, you can compare the effects of market volatilities on Seah Steel 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 Seah Steel with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seah Steel and Iljin Display.
Diversification Opportunities for Seah Steel and Iljin Display
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Seah and Iljin is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Seah Steel Corp and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and Seah Steel 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 Seah Steel Corp 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 Seah Steel i.e., Seah Steel and Iljin Display go up and down completely randomly.
Pair Corralation between Seah Steel and Iljin Display
Assuming the 90 days trading horizon Seah Steel Corp is expected to generate 0.49 times more return on investment than Iljin Display. However, Seah Steel Corp is 2.03 times less risky than Iljin Display. It trades about -0.03 of its potential returns per unit of risk. Iljin Display is currently generating about -0.02 per unit of risk. If you would invest 13,950,000 in Seah Steel Corp on September 12, 2024 and sell it today you would lose (2,240,000) from holding Seah Steel Corp or give up 16.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Seah Steel Corp vs. Iljin Display
Performance |
| Timeline |
| Seah Steel Corp |
| Iljin Display |
Seah Steel and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seah Steel and Iljin Display
The main advantage of trading using opposite Seah Steel and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seah Steel 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.| Seah Steel vs. Iljin Display | Seah Steel vs. Hana Financial | Seah Steel vs. DB Financial Investment | Seah Steel vs. Genie Music |
| Iljin Display vs. DAEDUCK ELECTRONICS CoLtd | Iljin Display vs. Sungmoon Electronics Co | Iljin Display vs. Solution Advanced Technology | Iljin Display vs. Busan Industrial Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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