Correlation Between Korean Air and Koryo Credit
Can any of the company-specific risk be diversified away by investing in both Korean Air and Koryo Credit 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 Koryo Credit 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 Koryo Credit Information, you can compare the effects of market volatilities on Korean Air and Koryo Credit 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 Koryo Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Koryo Credit.
Diversification Opportunities for Korean Air and Koryo Credit
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korean and Koryo is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Koryo Credit Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Koryo Credit Information 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 Koryo Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Koryo Credit Information has no effect on the direction of Korean Air i.e., Korean Air and Koryo Credit go up and down completely randomly.
Pair Corralation between Korean Air and Koryo Credit
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 1.26 times more return on investment than Koryo Credit. However, Korean Air is 1.26 times more volatile than Koryo Credit Information. It trades about 0.21 of its potential returns per unit of risk. Koryo Credit Information is currently generating about 0.18 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Air Lines vs. Koryo Credit Information
Performance |
| Timeline |
| Korean Air Lines |
| Koryo Credit Information |
Korean Air and Koryo Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Koryo Credit
The main advantage of trading using opposite Korean Air and Koryo Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Koryo Credit 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 Koryo Credit will offset losses from the drop in Koryo Credit'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 |
| Koryo Credit vs. Camus Engineering Construction | Koryo Credit vs. Dongkuk Structures Construction | Koryo Credit vs. Sam Yang Foods | Koryo Credit vs. Seoam Machinery Industry |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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