Correlation Between Hannong Chemicals and Korean Air
Can any of the company-specific risk be diversified away by investing in both Hannong Chemicals and Korean Air 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 Hannong Chemicals and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hannong Chemicals and Korean Air Lines, you can compare the effects of market volatilities on Hannong Chemicals and Korean Air 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 Hannong Chemicals with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hannong Chemicals and Korean Air.
Diversification Opportunities for Hannong Chemicals and Korean Air
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hannong and Korean is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hannong Chemicals and Korean Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Air Lines and Hannong Chemicals 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 Hannong Chemicals are associated (or correlated) with Korean Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Air Lines has no effect on the direction of Hannong Chemicals i.e., Hannong Chemicals and Korean Air go up and down completely randomly.
Pair Corralation between Hannong Chemicals and Korean Air
Assuming the 90 days trading horizon Hannong Chemicals is expected to generate 3.61 times more return on investment than Korean Air. However, Hannong Chemicals is 3.61 times more volatile than Korean Air Lines. It trades about 0.03 of its potential returns per unit of risk. Korean Air Lines is currently generating about 0.03 per unit of risk. If you would invest 1,081,567 in Hannong Chemicals on September 3, 2024 and sell it today you would earn a total of 326,433 from holding Hannong Chemicals or generate 30.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hannong Chemicals vs. Korean Air Lines
Performance |
| Timeline |
| Hannong Chemicals |
| Korean Air Lines |
Hannong Chemicals and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hannong Chemicals and Korean Air
The main advantage of trading using opposite Hannong Chemicals and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hannong Chemicals position performs unexpectedly, Korean Air 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 Korean Air will offset losses from the drop in Korean Air's long position.| Hannong Chemicals vs. AptaBio Therapeutics | Hannong Chemicals vs. Daewoo SBI SPAC | Hannong Chemicals vs. Dream Security co | Hannong Chemicals vs. Microfriend |
| Korean Air vs. INFINITT Healthcare Co | Korean Air vs. Daiyang Metal Co | Korean Air vs. Youngsin Metal Industrial | Korean Air vs. Osang Healthcare Co,Ltd |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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