Correlation Between Kukdo Chemical and Air Busan
Can any of the company-specific risk be diversified away by investing in both Kukdo Chemical and Air Busan 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 Kukdo Chemical and Air Busan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukdo Chemical and Air Busan Co, you can compare the effects of market volatilities on Kukdo Chemical and Air Busan 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 Kukdo Chemical with a short position of Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukdo Chemical and Air Busan.
Diversification Opportunities for Kukdo Chemical and Air Busan
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kukdo and Air is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Kukdo Chemical and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan and Kukdo Chemical 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 Kukdo Chemical are associated (or correlated) with Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Kukdo Chemical i.e., Kukdo Chemical and Air Busan go up and down completely randomly.
Pair Corralation between Kukdo Chemical and Air Busan
Assuming the 90 days trading horizon Kukdo Chemical is expected to under-perform the Air Busan. But the stock apears to be less risky and, when comparing its historical volatility, Kukdo Chemical is 1.51 times less risky than Air Busan. The stock trades about -0.22 of its potential returns per unit of risk. The Air Busan Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 236,500 in Air Busan Co on September 13, 2024 and sell it today you would lose (7,500) from holding Air Busan Co or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kukdo Chemical vs. Air Busan Co
Performance |
| Timeline |
| Kukdo Chemical |
| Air Busan |
Kukdo Chemical and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukdo Chemical and Air Busan
The main advantage of trading using opposite Kukdo Chemical and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukdo Chemical position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Kukdo Chemical vs. Air Busan Co | Kukdo Chemical vs. Hansol Homedeco Co | Kukdo Chemical vs. Hannong Chemicals | Kukdo Chemical vs. Homecast CoLtd |
| Air Busan vs. Jin Air Co | Air Busan vs. Tway Air Co | Air Busan vs. Solution Advanced Technology | Air Busan vs. Busan 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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