Correlation Between Hotel Shilla and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Hotel Shilla 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 Hotel Shilla and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hotel Shilla Co and Asiana Airlines, you can compare the effects of market volatilities on Hotel Shilla 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 Hotel Shilla with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hotel Shilla and Asiana Airlines.
Diversification Opportunities for Hotel Shilla and Asiana Airlines
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hotel and Asiana is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Hotel Shilla Co and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and Hotel Shilla 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 Hotel Shilla Co 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 Hotel Shilla i.e., Hotel Shilla and Asiana Airlines go up and down completely randomly.
Pair Corralation between Hotel Shilla and Asiana Airlines
Assuming the 90 days trading horizon Hotel Shilla Co is expected to under-perform the Asiana Airlines. But the stock apears to be less risky and, when comparing its historical volatility, Hotel Shilla Co is 1.35 times less risky than Asiana Airlines. The stock trades about -0.11 of its potential returns per unit of risk. The Asiana Airlines is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,497,000 in Asiana Airlines on October 26, 2024 and sell it today you would lose (445,000) from holding Asiana Airlines or give up 29.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hotel Shilla Co vs. Asiana Airlines
Performance |
| Timeline |
| Hotel Shilla |
| Asiana Airlines |
Hotel Shilla and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hotel Shilla and Asiana Airlines
The main advantage of trading using opposite Hotel Shilla and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hotel Shilla 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.| Hotel Shilla vs. Nable Communications | Hotel Shilla vs. Digital Power Communications | Hotel Shilla vs. Innowireless Co | Hotel Shilla vs. LG Display Co |
| Asiana Airlines vs. ABOV Semiconductor Co | Asiana Airlines vs. Lion Chemtech Co | Asiana Airlines vs. LG Household Healthcare | Asiana Airlines vs. Ssangyong Information Communication |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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