Correlation Between Asiana Airlines and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and Seoul Food 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 Asiana Airlines and Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and Seoul Food Industrial, you can compare the effects of market volatilities on Asiana Airlines and Seoul Food 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 Asiana Airlines with a short position of Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and Seoul Food.
Diversification Opportunities for Asiana Airlines and Seoul Food
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asiana and Seoul is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial and Asiana Airlines 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 Asiana Airlines are associated (or correlated) with Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and Seoul Food go up and down completely randomly.
Pair Corralation between Asiana Airlines and Seoul Food
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 1.03 times more return on investment than Seoul Food. However, Asiana Airlines is 1.03 times more volatile than Seoul Food Industrial. It trades about 0.11 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about 0.01 per unit of risk. If you would invest 1,012,000 in Asiana Airlines on October 15, 2024 and sell it today you would earn a total of 21,000 from holding Asiana Airlines or generate 2.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. Seoul Food Industrial
Performance |
| Timeline |
| Asiana Airlines |
| Seoul Food Industrial |
Asiana Airlines and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and Seoul Food
The main advantage of trading using opposite Asiana Airlines and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Asiana Airlines vs. ENF Technology Co | Asiana Airlines vs. Seoyon Topmetal Co | Asiana Airlines vs. DRB Industrial Co | Asiana Airlines vs. Drb Industrial |
| Seoul Food vs. Seoul Electronics Telecom | Seoul Food vs. Jeju Air Co | Seoul Food vs. KT Submarine Telecom | Seoul Food vs. Shinhan Inverse Silver |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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