Correlation Between Korea Air and Sambo Corrugated
Can any of the company-specific risk be diversified away by investing in both Korea Air and Sambo Corrugated 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 Sambo Corrugated 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 Sambo Corrugated Board, you can compare the effects of market volatilities on Korea Air and Sambo Corrugated 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 Sambo Corrugated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Air and Sambo Corrugated.
Diversification Opportunities for Korea Air and Sambo Corrugated
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Korea and Sambo is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Korea Air Svc and Sambo Corrugated Board in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sambo Corrugated Board 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 Sambo Corrugated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sambo Corrugated Board has no effect on the direction of Korea Air i.e., Korea Air and Sambo Corrugated go up and down completely randomly.
Pair Corralation between Korea Air and Sambo Corrugated
Assuming the 90 days trading horizon Korea Air Svc is expected to under-perform the Sambo Corrugated. In addition to that, Korea Air is 3.69 times more volatile than Sambo Corrugated Board. It trades about -0.18 of its total potential returns per unit of risk. Sambo Corrugated Board is currently generating about -0.12 per unit of volatility. If you would invest 816,000 in Sambo Corrugated Board on November 4, 2024 and sell it today you would lose (9,000) from holding Sambo Corrugated Board or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Air Svc vs. Sambo Corrugated Board
Performance |
| Timeline |
| Korea Air Svc |
| Sambo Corrugated Board |
Korea Air and Sambo Corrugated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Air and Sambo Corrugated
The main advantage of trading using opposite Korea Air and Sambo Corrugated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Air position performs unexpectedly, Sambo Corrugated 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 Sambo Corrugated will offset losses from the drop in Sambo Corrugated'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 |
| Sambo Corrugated vs. LAKE MATERIALS LTD | Sambo Corrugated vs. Ssangyong Materials Corp | Sambo Corrugated vs. Daejoo Electronic Materials | Sambo Corrugated vs. Formetal 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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