Correlation Between Iljin Display and Lotte Data
Can any of the company-specific risk be diversified away by investing in both Iljin Display and Lotte Data 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 Iljin Display and Lotte Data into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iljin Display and Lotte Data Communication, you can compare the effects of market volatilities on Iljin Display and Lotte Data 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 Iljin Display with a short position of Lotte Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and Lotte Data.
Diversification Opportunities for Iljin Display and Lotte Data
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Iljin and Lotte is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and Lotte Data Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotte Data Communication and Iljin Display 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 Iljin Display are associated (or correlated) with Lotte Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotte Data Communication has no effect on the direction of Iljin Display i.e., Iljin Display and Lotte Data go up and down completely randomly.
Pair Corralation between Iljin Display and Lotte Data
Assuming the 90 days trading horizon Iljin Display is expected to generate 1.46 times more return on investment than Lotte Data. However, Iljin Display is 1.46 times more volatile than Lotte Data Communication. It trades about 0.01 of its potential returns per unit of risk. Lotte Data Communication is currently generating about -0.13 per unit of risk. If you would invest 107,100 in Iljin Display on February 19, 2024 and sell it today you would lose (400.00) from holding Iljin Display or give up 0.37% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Iljin Display vs. Lotte Data Communication
Performance |
Timeline |
Iljin Display |
Lotte Data Communication |
Iljin Display and Lotte Data Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Iljin Display and Lotte Data
The main advantage of trading using opposite Iljin Display and Lotte Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, Lotte Data 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 Lotte Data will offset losses from the drop in Lotte Data's long position.The idea behind Iljin Display and Lotte Data Communication pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.Lotte Data vs. Ecoplastic | Lotte Data vs. National Plastic Co | Lotte Data vs. Sangsin Energy Display | Lotte Data vs. LS Materials |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Money Managers Screen money managers from public funds and ETFs managed around the world |