Correlation Between Korean Air and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both Korean Air and Sambo Corrugated 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 Sambo Corrugated 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 Sambo Corrugated Board, you can compare the effects of market volatilities on Korean Air and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Sambo Corrugated.
Diversification Opportunities for Korean Air and Sambo Corrugated
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Korean and Sambo is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Korean Air i.e., Korean Air and Sambo Corrugated go up and down completely randomly.
Pair Corralation between Korean Air and Sambo Corrugated
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 2.82 times more return on investment than Sambo Corrugated. However, Korean Air is 2.82 times more volatile than Sambo Corrugated Board. It trades about 0.23 of its potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.12 per unit of risk. If you would invest 2,345,000 in Korean Air Lines on November 4, 2024 and sell it today you would earn a total of 135,000 from holding Korean Air Lines or generate 5.76% 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. Sambo Corrugated Board
Performance |
| Timeline |
| Korean Air Lines |
| Sambo Corrugated Board |
Korean Air and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Sambo Corrugated
The main advantage of trading using opposite Korean Air and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated's long position.| Korean Air vs. WONIK Materials CoLtd | Korean Air vs. Jinro Distillers Co | Korean Air vs. DB Insurance Co | Korean Air vs. Ssangyong Materials Corp |
| Sambo Corrugated vs. LAKE MATERIALS LTD | Sambo Corrugated vs. Ssangyong Materials Corp | Sambo Corrugated vs. Daejoo Electronic Materials | Sambo Corrugated vs. Formetal 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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