Correlation Between Korean Air and Amogreentech CoLtd
Can any of the company-specific risk be diversified away by investing in both Korean Air and Amogreentech CoLtd 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 Amogreentech CoLtd 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 Amogreentech CoLtd, you can compare the effects of market volatilities on Korean Air and Amogreentech CoLtd 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 Amogreentech CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Amogreentech CoLtd.
Diversification Opportunities for Korean Air and Amogreentech CoLtd
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korean and Amogreentech is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and Amogreentech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amogreentech 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 Amogreentech CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amogreentech CoLtd has no effect on the direction of Korean Air i.e., Korean Air and Amogreentech CoLtd go up and down completely randomly.
Pair Corralation between Korean Air and Amogreentech CoLtd
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 0.44 times more return on investment than Amogreentech CoLtd. However, Korean Air Lines is 2.26 times less risky than Amogreentech CoLtd. It trades about 0.05 of its potential returns per unit of risk. Amogreentech CoLtd is currently generating about -0.08 per unit of risk. If you would invest 2,420,000 in Korean Air Lines on September 18, 2024 and sell it today you would earn a total of 40,000 from holding Korean Air Lines or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Korean Air Lines vs. Amogreentech CoLtd
Performance |
| Timeline |
| Korean Air Lines |
| Amogreentech CoLtd |
Korean Air and Amogreentech CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Amogreentech CoLtd
The main advantage of trading using opposite Korean Air and Amogreentech CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Amogreentech CoLtd 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 Amogreentech CoLtd will offset losses from the drop in Amogreentech CoLtd's 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 |
| Amogreentech CoLtd vs. Samick Musical Instruments | Amogreentech CoLtd vs. Cloud Air CoLtd | Amogreentech CoLtd vs. Korean Air Lines | Amogreentech CoLtd vs. Tway Air 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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