Correlation Between Korean Air and Kaonmedia
Can any of the company-specific risk be diversified away by investing in both Korean Air and Kaonmedia 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 Kaonmedia 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 Kaonmedia Co, you can compare the effects of market volatilities on Korean Air and Kaonmedia 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 Kaonmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Kaonmedia.
Diversification Opportunities for Korean Air and Kaonmedia
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Korean and Kaonmedia is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Kaonmedia Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaonmedia 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 Kaonmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaonmedia has no effect on the direction of Korean Air i.e., Korean Air and Kaonmedia go up and down completely randomly.
Pair Corralation between Korean Air and Kaonmedia
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 0.4 times more return on investment than Kaonmedia. However, Korean Air Lines is 2.52 times less risky than Kaonmedia. It trades about 0.04 of its potential returns per unit of risk. Kaonmedia Co is currently generating about -0.03 per unit of risk. If you would invest 2,179,688 in Korean Air Lines on September 1, 2024 and sell it today you would earn a total of 415,312 from holding Korean Air Lines or generate 19.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Air Lines vs. Kaonmedia Co
Performance |
| Timeline |
| Korean Air Lines |
| Kaonmedia |
Korean Air and Kaonmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Kaonmedia
The main advantage of trading using opposite Korean Air and Kaonmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Kaonmedia 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 Kaonmedia will offset losses from the drop in Kaonmedia's long position.| Korean Air vs. Korea New Network | Korean Air vs. ICD Co | Korean Air vs. DYPNF CoLtd | Korean Air vs. Busan Industrial Co |
| Kaonmedia vs. Dongsin Engineering Construction | Kaonmedia vs. Doosan Fuel Cell | Kaonmedia vs. Daishin Balance 1 | Kaonmedia vs. Total Soft Bank |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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