Correlation Between Korea Air and Jeong Moon
Can any of the company-specific risk be diversified away by investing in both Korea Air and Jeong Moon 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 Jeong Moon 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 Jeong Moon Information, you can compare the effects of market volatilities on Korea Air and Jeong Moon 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 Jeong Moon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Air and Jeong Moon.
Diversification Opportunities for Korea Air and Jeong Moon
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Korea and Jeong is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Korea Air Svc and Jeong Moon Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeong Moon Information 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 Jeong Moon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeong Moon Information has no effect on the direction of Korea Air i.e., Korea Air and Jeong Moon go up and down completely randomly.
Pair Corralation between Korea Air and Jeong Moon
Assuming the 90 days trading horizon Korea Air Svc is expected to generate 1.65 times more return on investment than Jeong Moon. However, Korea Air is 1.65 times more volatile than Jeong Moon Information. It trades about 0.04 of its potential returns per unit of risk. Jeong Moon Information is currently generating about -0.09 per unit of risk. If you would invest 5,620,000 in Korea Air Svc on August 28, 2024 and sell it today you would earn a total of 80,000 from holding Korea Air Svc or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Air Svc vs. Jeong Moon Information
Performance |
| Timeline |
| Korea Air Svc |
| Jeong Moon Information |
Korea Air and Jeong Moon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Air and Jeong Moon
The main advantage of trading using opposite Korea Air and Jeong Moon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Air position performs unexpectedly, Jeong Moon 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 Jeong Moon will offset losses from the drop in Jeong Moon's long position.| Korea Air vs. SBI Investment KOREA | Korea Air vs. Stic Investments | Korea Air vs. E Investment Development | Korea Air vs. NH Investment Securities |
| Jeong Moon vs. Korea Real Estate | Jeong Moon vs. Korea Ratings Co | Jeong Moon vs. IQuest Co | Jeong Moon vs. Wonbang Tech 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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