Correlation Between ITM Semiconductor and Ilji Technology

Can any of the company-specific risk be diversified away by investing in both ITM Semiconductor and Ilji Technology 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 ITM Semiconductor and Ilji Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ITM Semiconductor Co and Ilji Technology Co, you can compare the effects of market volatilities on ITM Semiconductor and Ilji Technology 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 ITM Semiconductor with a short position of Ilji Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITM Semiconductor and Ilji Technology.

Diversification Opportunities for ITM Semiconductor and Ilji Technology

-0.45

Correlation Coefficient

ITM Semiconductor  Ilji Technology

Very good diversification

The 3 months correlation between ITM and Ilji is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ITM Semiconductor Co and Ilji Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ilji Technology and ITM Semiconductor 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 ITM Semiconductor Co are associated (or correlated) with Ilji Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ilji Technology has no effect on the direction of ITM Semiconductor i.e., ITM Semiconductor and Ilji Technology go up and down completely randomly.

Pair Corralation between ITM Semiconductor and Ilji Technology

Assuming the 90 days trading horizon ITM Semiconductor Co is expected to under-perform the Ilji Technology. In addition to that, ITM Semiconductor is 1.18 times more volatile than Ilji Technology Co. It trades about -0.04 of its total potential returns per unit of risk. Ilji Technology Co is currently generating about 0.03 per unit of volatility. If you would invest  351,055  in Ilji Technology Co on December 21, 2024 and sell it today you would earn a total of  9,945  from holding Ilji Technology Co or generate 2.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

ITM Semiconductor Co  vs.  Ilji Technology Co

ITM Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days ITM Semiconductor Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Ilji Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ilji Technology Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Ilji Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ITM Semiconductor and Ilji Technology

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

The idea behind ITM Semiconductor Co and Ilji Technology Co 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.