Correlation Between Korean Air and Shinil Industrial
Can any of the company-specific risk be diversified away by investing in both Korean Air and Shinil Industrial 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 Shinil Industrial 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 Shinil Industrial Co, you can compare the effects of market volatilities on Korean Air and Shinil Industrial 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 Shinil Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Shinil Industrial.
Diversification Opportunities for Korean Air and Shinil Industrial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korean and Shinil is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Shinil Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinil Industrial 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 Shinil Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinil Industrial has no effect on the direction of Korean Air i.e., Korean Air and Shinil Industrial go up and down completely randomly.
Pair Corralation between Korean Air and Shinil Industrial
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 1.14 times more return on investment than Shinil Industrial. However, Korean Air is 1.14 times more volatile than Shinil Industrial Co. It trades about 0.0 of its potential returns per unit of risk. Shinil Industrial Co is currently generating about -0.04 per unit of risk. If you would invest 2,354,063 in Korean Air Lines on October 14, 2024 and sell it today you would lose (59,063) from holding Korean Air Lines or give up 2.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Air Lines vs. Shinil Industrial Co
Performance |
| Timeline |
| Korean Air Lines |
| Shinil Industrial |
Korean Air and Shinil Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Shinil Industrial
The main advantage of trading using opposite Korean Air and Shinil Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Shinil Industrial 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 Shinil Industrial will offset losses from the drop in Shinil Industrial's long position.| Korean Air vs. Seoam Machinery Industry | Korean Air vs. Camus Engineering Construction | Korean Air vs. Nice Information Telecommunication | Korean Air vs. Kisan Telecom Co |
| Shinil Industrial vs. Korean Air Lines | Shinil Industrial vs. Jeju Air Co | Shinil Industrial vs. Wireless Power Amplifier | Shinil Industrial vs. Tway Air 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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