Correlation Between Sajo Seafood and Korean Air
Can any of the company-specific risk be diversified away by investing in both Sajo Seafood 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 Sajo Seafood and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sajo Seafood and Korean Air Lines, you can compare the effects of market volatilities on Sajo Seafood 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 Sajo Seafood with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sajo Seafood and Korean Air.
Diversification Opportunities for Sajo Seafood and Korean Air
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sajo and Korean is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Sajo Seafood 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 Sajo Seafood 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 Sajo Seafood 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 Sajo Seafood i.e., Sajo Seafood and Korean Air go up and down completely randomly.
Pair Corralation between Sajo Seafood and Korean Air
Assuming the 90 days trading horizon Sajo Seafood is expected to generate 2.39 times more return on investment than Korean Air. However, Sajo Seafood is 2.39 times more volatile than Korean Air Lines. It trades about 0.01 of its potential returns per unit of risk. Korean Air Lines is currently generating about 0.0 per unit of risk. If you would invest 509,000 in Sajo Seafood on October 13, 2024 and sell it today you would lose (48,000) from holding Sajo Seafood or give up 9.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sajo Seafood vs. Korean Air Lines
Performance |
| Timeline |
| Sajo Seafood |
| Korean Air Lines |
Sajo Seafood and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sajo Seafood and Korean Air
The main advantage of trading using opposite Sajo Seafood and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sajo Seafood 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.| Sajo Seafood vs. Shinil Electronics Co | Sajo Seafood vs. Daewoo Electronic Components | Sajo Seafood vs. Hankukpackage Co | Sajo Seafood vs. Samji Electronics Co |
| Korean Air vs. DB Insurance Co | Korean Air vs. BNK Financial Group | Korean Air vs. Jeju Bank | Korean Air vs. Youl Chon Chemical |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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