Correlation Between Korea Air and AeroSpace Technology
Can any of the company-specific risk be diversified away by investing in both Korea Air and AeroSpace Technology 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 AeroSpace Technology 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 AeroSpace Technology of, you can compare the effects of market volatilities on Korea Air and AeroSpace Technology 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 AeroSpace Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Air and AeroSpace Technology.
Diversification Opportunities for Korea Air and AeroSpace Technology
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Korea and AeroSpace is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Korea Air Svc and AeroSpace Technology of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AeroSpace 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 AeroSpace Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AeroSpace Technology has no effect on the direction of Korea Air i.e., Korea Air and AeroSpace Technology go up and down completely randomly.
Pair Corralation between Korea Air and AeroSpace Technology
Assuming the 90 days trading horizon Korea Air Svc is expected to generate 0.62 times more return on investment than AeroSpace Technology. However, Korea Air Svc is 1.62 times less risky than AeroSpace Technology. It trades about 0.01 of its potential returns per unit of risk. AeroSpace Technology of is currently generating about -0.05 per unit of risk. If you would invest 5,580,000 in Korea Air Svc on November 3, 2024 and sell it today you would lose (310,000) from holding Korea Air Svc or give up 5.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.94% |
| Values | Daily Returns |
Korea Air Svc vs. AeroSpace Technology of
Performance |
| Timeline |
| Korea Air Svc |
| AeroSpace Technology |
Korea Air and AeroSpace Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Air and AeroSpace Technology
The main advantage of trading using opposite Korea Air and AeroSpace Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Air position performs unexpectedly, AeroSpace Technology 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 AeroSpace Technology will offset losses from the drop in AeroSpace Technology'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 |
| AeroSpace Technology vs. Cuckoo Electronics Co | AeroSpace Technology vs. Kolon Plastics | AeroSpace Technology vs. Ecoplastic | AeroSpace Technology vs. RF Materials 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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