Correlation Between DAEDUCK ELECTRONICS and Iljin Display
Can any of the company-specific risk be diversified away by investing in both DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS and Iljin Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAEDUCK ELECTRONICS CoLtd and Iljin Display, you can compare the effects of market volatilities on DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS with a short position of Iljin Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAEDUCK ELECTRONICS and Iljin Display.
Diversification Opportunities for DAEDUCK ELECTRONICS and Iljin Display
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DAEDUCK and Iljin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding DAEDUCK ELECTRONICS CoLtd and Iljin Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iljin Display and DAEDUCK ELECTRONICS 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 DAEDUCK ELECTRONICS CoLtd 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 DAEDUCK ELECTRONICS i.e., DAEDUCK ELECTRONICS and Iljin Display go up and down completely randomly.
Pair Corralation between DAEDUCK ELECTRONICS and Iljin Display
Assuming the 90 days trading horizon DAEDUCK ELECTRONICS CoLtd is expected to generate 0.6 times more return on investment than Iljin Display. However, DAEDUCK ELECTRONICS CoLtd is 1.67 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 -0.03 per unit of risk. If you would invest 956,093 in DAEDUCK ELECTRONICS CoLtd on November 11, 2024 and sell it today you would lose (147,093) from holding DAEDUCK ELECTRONICS CoLtd or give up 15.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DAEDUCK ELECTRONICS CoLtd vs. Iljin Display
Performance |
| Timeline |
| DAEDUCK ELECTRONICS CoLtd |
| Iljin Display |
DAEDUCK ELECTRONICS and Iljin Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAEDUCK ELECTRONICS and Iljin Display
The main advantage of trading using opposite DAEDUCK ELECTRONICS and Iljin Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAEDUCK ELECTRONICS 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.| DAEDUCK ELECTRONICS vs. Ewon Comfortech Co | DAEDUCK ELECTRONICS vs. Puloon Technology | DAEDUCK ELECTRONICS vs. CU Tech Corp | DAEDUCK ELECTRONICS vs. Hanmi Semiconductor Co |
| Iljin Display vs. SK IE Technology | Iljin Display vs. Solus Advanced Materials | Iljin Display vs. DAEDUCK ELECTRONICS CoLtd | Iljin Display vs. Sungmoon Electronics 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 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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