Correlation Between Korean Air and Seoyon Topmetal
Can any of the company-specific risk be diversified away by investing in both Korean Air and Seoyon Topmetal 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 Seoyon Topmetal 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 Seoyon Topmetal Co, you can compare the effects of market volatilities on Korean Air and Seoyon Topmetal 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 Seoyon Topmetal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Seoyon Topmetal.
Diversification Opportunities for Korean Air and Seoyon Topmetal
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korean and Seoyon is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Seoyon Topmetal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoyon Topmetal 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 Seoyon Topmetal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoyon Topmetal has no effect on the direction of Korean Air i.e., Korean Air and Seoyon Topmetal go up and down completely randomly.
Pair Corralation between Korean Air and Seoyon Topmetal
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 1.45 times more return on investment than Seoyon Topmetal. However, Korean Air is 1.45 times more volatile than Seoyon Topmetal Co. It trades about 0.02 of its potential returns per unit of risk. Seoyon Topmetal Co is currently generating about -0.11 per unit of risk. If you would invest 2,340,000 in Korean Air Lines on November 6, 2024 and sell it today you would earn a total of 10,000 from holding Korean Air Lines or generate 0.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Air Lines vs. Seoyon Topmetal Co
Performance |
| Timeline |
| Korean Air Lines |
| Seoyon Topmetal |
Korean Air and Seoyon Topmetal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Seoyon Topmetal
The main advantage of trading using opposite Korean Air and Seoyon Topmetal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Seoyon Topmetal 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 Seoyon Topmetal will offset losses from the drop in Seoyon Topmetal's long position.| Korean Air vs. Jeju Air Co | Korean Air vs. Korea Air Svc | Korean Air vs. Neungyule Education | Korean Air vs. GS Retail Co |
| Seoyon Topmetal vs. Polaris Office Corp | Seoyon Topmetal vs. iNtRON Biotechnology | Seoyon Topmetal vs. Shinhan Inverse Silver | Seoyon Topmetal vs. GS Retail 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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