Correlation Between Korean Air and Golden Bridge
Can any of the company-specific risk be diversified away by investing in both Korean Air and Golden Bridge 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 Korean Air and Golden Bridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korean Air Lines and Golden Bridge Investment, you can compare the effects of market volatilities on Korean Air and Golden Bridge 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 Korean Air with a short position of Golden Bridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Golden Bridge.
Diversification Opportunities for Korean Air and Golden Bridge
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korean and Golden is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Golden Bridge Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Bridge Investment and Korean Air 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 Korean Air Lines are associated (or correlated) with Golden Bridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Bridge Investment has no effect on the direction of Korean Air i.e., Korean Air and Golden Bridge go up and down completely randomly.
Pair Corralation between Korean Air and Golden Bridge
Assuming the 90 days trading horizon Korean Air Lines is expected to under-perform the Golden Bridge. In addition to that, Korean Air is 2.03 times more volatile than Golden Bridge Investment. It trades about -0.19 of its total potential returns per unit of risk. Golden Bridge Investment is currently generating about 0.06 per unit of volatility. If you would invest 42,600 in Golden Bridge Investment on October 15, 2024 and sell it today you would earn a total of 400.00 from holding Golden Bridge Investment or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Air Lines vs. Golden Bridge Investment
Performance |
| Timeline |
| Korean Air Lines |
| Golden Bridge Investment |
Korean Air and Golden Bridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Golden Bridge
The main advantage of trading using opposite Korean Air and Golden Bridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Golden Bridge 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 Golden Bridge will offset losses from the drop in Golden Bridge's long position.| Korean Air vs. Nh Investment And | Korean Air vs. Sewoon Medical Co | Korean Air vs. Golden Bridge Investment | Korean Air vs. Leaders Technology Investment |
| Golden Bridge vs. Sempio Foods Co | Golden Bridge vs. Organic Special Pet | Golden Bridge vs. FoodNamoo | Golden Bridge vs. Iljin Display |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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