Correlation Between Korean Air and Kukdo Chemical
Can any of the company-specific risk be diversified away by investing in both Korean Air and Kukdo Chemical 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 Kukdo Chemical 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 Kukdo Chemical Co, you can compare the effects of market volatilities on Korean Air and Kukdo Chemical 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 Kukdo Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Kukdo Chemical.
Diversification Opportunities for Korean Air and Kukdo Chemical
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korean and Kukdo is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Kukdo Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdo Chemical 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 Kukdo Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdo Chemical has no effect on the direction of Korean Air i.e., Korean Air and Kukdo Chemical go up and down completely randomly.
Pair Corralation between Korean Air and Kukdo Chemical
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 1.07 times more return on investment than Kukdo Chemical. However, Korean Air is 1.07 times more volatile than Kukdo Chemical Co. It trades about 0.0 of its potential returns per unit of risk. Kukdo Chemical Co is currently generating about -0.1 per unit of risk. If you would invest 2,420,000 in Korean Air Lines on September 19, 2024 and sell it today you would lose (5,000) from holding Korean Air Lines or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Air Lines vs. Kukdo Chemical Co
Performance |
| Timeline |
| Korean Air Lines |
| Kukdo Chemical |
Korean Air and Kukdo Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Kukdo Chemical
The main advantage of trading using opposite Korean Air and Kukdo Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Kukdo Chemical 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 Kukdo Chemical will offset losses from the drop in Kukdo Chemical's long position.| Korean Air vs. E Investment Development | Korean Air vs. Daejung Chemicals Metals | Korean Air vs. KTB Investment Securities | Korean Air vs. SBI Investment KOREA |
| Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. Samsung Electronics Co | Kukdo Chemical vs. SK Hynix | Kukdo Chemical vs. POSCO Holdings |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |