Correlation Between Korean Air and Kakaopay Corp
Can any of the company-specific risk be diversified away by investing in both Korean Air and Kakaopay Corp 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 Kakaopay Corp 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 kakaopay Corp, you can compare the effects of market volatilities on Korean Air and Kakaopay Corp 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 Kakaopay Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korean Air and Kakaopay Corp.
Diversification Opportunities for Korean Air and Kakaopay Corp
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korean and Kakaopay is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Korean Air Lines and kakaopay Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on kakaopay Corp 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 Kakaopay Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of kakaopay Corp has no effect on the direction of Korean Air i.e., Korean Air and Kakaopay Corp go up and down completely randomly.
Pair Corralation between Korean Air and Kakaopay Corp
Assuming the 90 days trading horizon Korean Air Lines is expected to generate 0.55 times more return on investment than Kakaopay Corp. However, Korean Air Lines is 1.82 times less risky than Kakaopay Corp. It trades about 0.2 of its potential returns per unit of risk. kakaopay Corp is currently generating about 0.02 per unit of risk. If you would invest 2,200,000 in Korean Air Lines on September 3, 2024 and sell it today you would earn a total of 395,000 from holding Korean Air Lines or generate 17.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korean Air Lines vs. kakaopay Corp
Performance |
| Timeline |
| Korean Air Lines |
| kakaopay Corp |
Korean Air and Kakaopay Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korean Air and Kakaopay Corp
The main advantage of trading using opposite Korean Air and Kakaopay Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korean Air position performs unexpectedly, Kakaopay Corp 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 Kakaopay Corp will offset losses from the drop in Kakaopay Corp'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 |
| Kakaopay Corp vs. PLAYWITH | Kakaopay Corp vs. LG Household Healthcare | Kakaopay Corp vs. Formetal Co | Kakaopay Corp vs. Korean Air Lines |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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