Correlation Between Ni Steel and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Ni Steel and Asiana Airlines 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 Ni Steel and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ni Steel and Asiana Airlines, you can compare the effects of market volatilities on Ni Steel and Asiana Airlines 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 Ni Steel with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ni Steel and Asiana Airlines.
Diversification Opportunities for Ni Steel and Asiana Airlines
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 008260 and Asiana is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Ni Steel and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and Ni Steel 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 Ni Steel are associated (or correlated) with Asiana Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiana Airlines has no effect on the direction of Ni Steel i.e., Ni Steel and Asiana Airlines go up and down completely randomly.
Pair Corralation between Ni Steel and Asiana Airlines
Assuming the 90 days trading horizon Ni Steel is expected to generate 3.39 times less return on investment than Asiana Airlines. In addition to that, Ni Steel is 1.61 times more volatile than Asiana Airlines. It trades about 0.04 of its total potential returns per unit of risk. Asiana Airlines is currently generating about 0.23 per unit of volatility. If you would invest 994,000 in Asiana Airlines on August 29, 2024 and sell it today you would earn a total of 105,000 from holding Asiana Airlines or generate 10.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ni Steel vs. Asiana Airlines
Performance |
| Timeline |
| Ni Steel |
| Asiana Airlines |
Ni Steel and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ni Steel and Asiana Airlines
The main advantage of trading using opposite Ni Steel and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ni Steel position performs unexpectedly, Asiana Airlines 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 Asiana Airlines will offset losses from the drop in Asiana Airlines' long position.| Ni Steel vs. Jeju Air Co | Ni Steel vs. Daejoo Electronic Materials | Ni Steel vs. TOPMATERIAL LTD | Ni Steel vs. LAKE MATERIALS LTD |
| Asiana Airlines vs. Home Center Holdings | Asiana Airlines vs. Hyunwoo Industrial Co | Asiana Airlines vs. Daelim Industrial Co | Asiana Airlines vs. Seoyon Topmetal 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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