Correlation Between Iljin Display and NICE Information

Can any of the company-specific risk be diversified away by investing in both Iljin Display and NICE Information 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 NICE Information into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Iljin Display and NICE Information Service, you can compare the effects of market volatilities on Iljin Display and NICE Information 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 NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iljin Display and NICE Information.

Diversification Opportunities for Iljin Display and NICE Information

-0.03

Correlation Coefficient

Iljin Display  NICE Information

Good diversification

The 3 months correlation between Iljin and NICE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Iljin Display and NICE Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICE Information Service 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 NICE Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICE Information Service has no effect on the direction of Iljin Display i.e., Iljin Display and NICE Information go up and down completely randomly.

Pair Corralation between Iljin Display and NICE Information

Assuming the 90 days trading horizon Iljin Display is expected to under-perform the NICE Information. But the stock apears to be less risky and, when comparing its historical volatility, Iljin Display is 1.08 times less risky than NICE Information. The stock trades about -0.02 of its potential returns per unit of risk. The NICE Information Service is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  1,250,000  in NICE Information Service on December 22, 2024 and sell it today you would lose (12,000) from holding NICE Information Service or give up 0.96% 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.  NICE Information Service

Iljin Display

Risk-Adjusted Performance

Very Weak

Over the last 90 days Iljin Display has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Iljin Display is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

NICE Information Service

Risk-Adjusted Performance

Very Weak

Over the last 90 days NICE Information Service has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NICE Information is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Iljin Display and NICE Information

The main advantage of trading using opposite Iljin Display and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iljin Display position performs unexpectedly, NICE Information 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 NICE Information will offset losses from the drop in NICE Information's long position.

The idea behind Iljin Display and NICE Information Service 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.

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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.