Correlation Between Korea Air and Bosung Power
Can any of the company-specific risk be diversified away by investing in both Korea Air and Bosung Power 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 Korea Air and Bosung Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Air Svc and Bosung Power Technology, you can compare the effects of market volatilities on Korea Air and Bosung Power 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 Korea Air with a short position of Bosung Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Air and Bosung Power.
Diversification Opportunities for Korea Air and Bosung Power
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and Bosung is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Korea Air Svc and Bosung Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bosung Power Technology and Korea 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 Korea Air Svc are associated (or correlated) with Bosung Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bosung Power Technology has no effect on the direction of Korea Air i.e., Korea Air and Bosung Power go up and down completely randomly.
Pair Corralation between Korea Air and Bosung Power
Assuming the 90 days trading horizon Korea Air is expected to generate 3.16 times less return on investment than Bosung Power. But when comparing it to its historical volatility, Korea Air Svc is 1.31 times less risky than Bosung Power. It trades about 0.01 of its potential returns per unit of risk. Bosung Power Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 310,000 in Bosung Power Technology on November 3, 2024 and sell it today you would lose (12,000) from holding Bosung Power Technology or give up 3.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.58% |
| Values | Daily Returns |
Korea Air Svc vs. Bosung Power Technology
Performance |
| Timeline |
| Korea Air Svc |
| Bosung Power Technology |
Korea Air and Bosung Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Air and Bosung Power
The main advantage of trading using opposite Korea Air and Bosung Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Air position performs unexpectedly, Bosung Power 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 Bosung Power will offset losses from the drop in Bosung Power's long position.| Korea Air vs. EBEST Investment Securities | Korea Air vs. KTB Investment Securities | Korea Air vs. Coloray International Investment | Korea Air vs. SV Investment |
| Bosung Power vs. Hironic Co | Bosung Power vs. SS TECH | Bosung Power vs. Yura Tech Co | Bosung Power vs. Hankook Steel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |