Correlation Between Korea Air and Cenit
Can any of the company-specific risk be diversified away by investing in both Korea Air and Cenit 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 Cenit 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 Cenit Co, you can compare the effects of market volatilities on Korea Air and Cenit 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 Cenit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Air and Cenit.
Diversification Opportunities for Korea Air and Cenit
Average diversification
The 3 months correlation between Korea and Cenit is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Korea Air Svc and Cenit Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cenit 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 Cenit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cenit has no effect on the direction of Korea Air i.e., Korea Air and Cenit go up and down completely randomly.
Pair Corralation between Korea Air and Cenit
Assuming the 90 days trading horizon Korea Air Svc is expected to generate 1.39 times more return on investment than Cenit. However, Korea Air is 1.39 times more volatile than Cenit Co. It trades about 0.0 of its potential returns per unit of risk. Cenit Co is currently generating about -0.14 per unit of risk. If you would invest 5,270,000 in Korea Air Svc on November 28, 2024 and sell it today you would lose (10,000) from holding Korea Air Svc or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Korea Air Svc vs. Cenit Co
Performance |
| Timeline |
| Korea Air Svc |
| Cenit |
Korea Air and Cenit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Air and Cenit
The main advantage of trading using opposite Korea Air and Cenit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Air position performs unexpectedly, Cenit 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 Cenit will offset losses from the drop in Cenit's long position.| Korea Air vs. Hana Technology Co | Korea Air vs. INFINITT Healthcare Co | Korea Air vs. Daejung Chemicals Metals | Korea Air vs. Eagon Industrial 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |