Correlation Between Korean Air and Alton Sports
Can any of the company-specific risk be diversified away by investing in both Korean Air and Alton Sports 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 Alton Sports 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 Alton Sports CoLtd, you can compare the effects of market volatilities on Korean Air and Alton Sports 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 Alton Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Alton Sports.
Diversification Opportunities for Korean Air and Alton Sports
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korean and Alton is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Alton Sports CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alton Sports CoLtd 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 Alton Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alton Sports CoLtd has no effect on the direction of Korean Air i.e., Korean Air and Alton Sports go up and down completely randomly.
Pair Corralation between Korean Air and Alton Sports
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 0.91 times more return on investment than Alton Sports. However, Korean Air Lines is 1.1 times less risky than Alton Sports. It trades about 0.11 of its potential returns per unit of risk. Alton Sports CoLtd is currently generating about -0.26 per unit of risk. If you would invest 2,320,000 in Korean Air Lines on September 13, 2024 and sell it today you would earn a total of 100,000 from holding Korean Air Lines or generate 4.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Korean Air Lines vs. Alton Sports CoLtd
Performance |
| Timeline |
| Korean Air Lines |
| Alton Sports CoLtd |
Korean Air and Alton Sports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Alton Sports
The main advantage of trading using opposite Korean Air and Alton Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Alton Sports 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 Alton Sports will offset losses from the drop in Alton Sports' long position.| Korean Air vs. Korea New Network | Korean Air vs. Solution Advanced Technology | Korean Air vs. Busan Industrial Co | Korean Air vs. Busan Ind |
| Alton Sports vs. Daou Data Corp | Alton Sports vs. Solution Advanced Technology | Alton Sports vs. Busan Industrial Co | Alton Sports vs. Busan Ind |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |