Correlation Between Hanjin Transportation and Air Busan
Can any of the company-specific risk be diversified away by investing in both Hanjin Transportation and Air Busan 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 Hanjin Transportation and Air Busan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanjin Transportation Co and Air Busan Co, you can compare the effects of market volatilities on Hanjin Transportation and Air Busan 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 Hanjin Transportation with a short position of Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanjin Transportation and Air Busan.
Diversification Opportunities for Hanjin Transportation and Air Busan
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hanjin and Air is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Hanjin Transportation Co and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan and Hanjin Transportation 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 Hanjin Transportation Co are associated (or correlated) with Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Hanjin Transportation i.e., Hanjin Transportation and Air Busan go up and down completely randomly.
Pair Corralation between Hanjin Transportation and Air Busan
Assuming the 90 days trading horizon Hanjin Transportation Co is expected to generate 0.8 times more return on investment than Air Busan. However, Hanjin Transportation Co is 1.25 times less risky than Air Busan. It trades about 0.0 of its potential returns per unit of risk. Air Busan Co is currently generating about -0.03 per unit of risk. If you would invest 1,992,633 in Hanjin Transportation Co on October 14, 2024 and sell it today you would lose (34,633) from holding Hanjin Transportation Co or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hanjin Transportation Co vs. Air Busan Co
Performance |
| Timeline |
| Hanjin Transportation |
| Air Busan |
Hanjin Transportation and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanjin Transportation and Air Busan
The main advantage of trading using opposite Hanjin Transportation and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanjin Transportation position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Hanjin Transportation vs. RFTech Co | Hanjin Transportation vs. BNK Financial Group | Hanjin Transportation vs. Hana Financial | Hanjin Transportation vs. Samsung Life Insurance |
| Air Busan vs. Digital Power Communications | Air Busan vs. Nable Communications | Air Busan vs. Samyoung Electronics Co | Air Busan vs. Samsung 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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