Correlation Between Sung Bo and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Sung Bo 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 Sung Bo and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sung Bo Chemicals and Asiana Airlines, you can compare the effects of market volatilities on Sung Bo 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 Sung Bo with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sung Bo and Asiana Airlines.
Diversification Opportunities for Sung Bo and Asiana Airlines
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sung and Asiana is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sung Bo Chemicals and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and Sung Bo 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 Sung Bo Chemicals 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 Sung Bo i.e., Sung Bo and Asiana Airlines go up and down completely randomly.
Pair Corralation between Sung Bo and Asiana Airlines
Assuming the 90 days trading horizon Sung Bo Chemicals is expected to under-perform the Asiana Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Sung Bo Chemicals is 1.15 times less risky than Asiana Airlines. The stock trades about -0.04 of its potential returns per unit of risk. The Asiana Airlines is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,251,000 in Asiana Airlines on September 2, 2024 and sell it today you would lose (177,000) from holding Asiana Airlines or give up 14.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sung Bo Chemicals vs. Asiana Airlines
Performance |
| Timeline |
| Sung Bo Chemicals |
| Asiana Airlines |
Sung Bo and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sung Bo and Asiana Airlines
The main advantage of trading using opposite Sung Bo and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sung Bo 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.| Sung Bo vs. AptaBio Therapeutics | Sung Bo vs. Daewoo SBI SPAC | Sung Bo vs. Dream Security co | Sung Bo vs. Microfriend |
| Asiana Airlines vs. AptaBio Therapeutics | Asiana Airlines vs. Daewoo SBI SPAC | Asiana Airlines vs. Dream Security co | Asiana Airlines vs. Microfriend |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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