Correlation Between Korean Air and Total Soft
Can any of the company-specific risk be diversified away by investing in both Korean Air and Total Soft 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 Total Soft 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 Total Soft Bank, you can compare the effects of market volatilities on Korean Air and Total Soft 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 Total Soft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Total Soft.
Diversification Opportunities for Korean Air and Total Soft
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korean and Total is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Total Soft Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Soft Bank 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 Total Soft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Soft Bank has no effect on the direction of Korean Air i.e., Korean Air and Total Soft go up and down completely randomly.
Pair Corralation between Korean Air and Total Soft
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 0.2 times more return on investment than Total Soft. However, Korean Air Lines is 4.91 times less risky than Total Soft. It trades about 0.21 of its potential returns per unit of risk. Total Soft Bank is currently generating about -0.09 per unit of risk. If you would invest 2,435,000 in Korean Air Lines on September 3, 2024 and sell it today you would earn a total of 160,000 from holding Korean Air Lines or generate 6.57% 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. Total Soft Bank
Performance |
| Timeline |
| Korean Air Lines |
| Total Soft Bank |
Korean Air and Total Soft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Total Soft
The main advantage of trading using opposite Korean Air and Total Soft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Total Soft 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 Total Soft will offset losses from the drop in Total Soft's long position.| Korean Air vs. INFINITT Healthcare Co | Korean Air vs. Daiyang Metal Co | Korean Air vs. Youngsin Metal Industrial | Korean Air vs. Osang Healthcare Co,Ltd |
| Total Soft vs. Hanmi Semiconductor Co | Total Soft vs. Iljin Display | Total Soft vs. Dongbang Transport Logistics | Total Soft vs. Daol Investment Securities |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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