Correlation Between SH Energy and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both SH Energy and Asiana Airlines 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 SH Energy and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SH Energy Chemical and Asiana Airlines, you can compare the effects of market volatilities on SH Energy and Asiana Airlines 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 SH Energy with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of SH Energy and Asiana Airlines.
Diversification Opportunities for SH Energy and Asiana Airlines
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between 002360 and Asiana is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SH Energy Chemical and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and SH Energy 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 SH Energy Chemical are associated (or correlated) with Asiana Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiana Airlines has no effect on the direction of SH Energy i.e., SH Energy and Asiana Airlines go up and down completely randomly.
Pair Corralation between SH Energy and Asiana Airlines
Assuming the 90 days trading horizon SH Energy Chemical is expected to generate 1.58 times more return on investment than Asiana Airlines. However, SH Energy is 1.58 times more volatile than Asiana Airlines. It trades about 0.14 of its potential returns per unit of risk. Asiana Airlines is currently generating about 0.19 per unit of risk. If you would invest 50,600 in SH Energy Chemical on August 30, 2024 and sell it today you would earn a total of 5,200 from holding SH Energy Chemical or generate 10.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
SH Energy Chemical vs. Asiana Airlines
Performance |
| Timeline |
| SH Energy Chemical |
| Asiana Airlines |
SH Energy and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SH Energy and Asiana Airlines
The main advantage of trading using opposite SH Energy and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SH Energy position performs unexpectedly, Asiana Airlines 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 Asiana Airlines will offset losses from the drop in Asiana Airlines' long position.| SH Energy vs. AptaBio Therapeutics | SH Energy vs. Daewoo SBI SPAC | SH Energy vs. Dream Security co | SH Energy vs. Microfriend |
| Asiana Airlines vs. Air Busan Co | Asiana Airlines vs. Jeju Air Co | Asiana Airlines vs. Osang Healthcare Co,Ltd | Asiana Airlines vs. DAEDUCK ELECTRONICS CoLtd |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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