Correlation Between Asiana Airlines and POSCO Holdings
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and POSCO Holdings 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 POSCO Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and POSCO Holdings, you can compare the effects of market volatilities on Asiana Airlines and POSCO Holdings 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 POSCO Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and POSCO Holdings.
Diversification Opportunities for Asiana Airlines and POSCO Holdings
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asiana and POSCO is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and POSCO Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POSCO Holdings 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 POSCO Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POSCO Holdings has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and POSCO Holdings go up and down completely randomly.
Pair Corralation between Asiana Airlines and POSCO Holdings
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 0.75 times more return on investment than POSCO Holdings. However, Asiana Airlines is 1.34 times less risky than POSCO Holdings. It trades about 0.24 of its potential returns per unit of risk. POSCO Holdings is currently generating about -0.13 per unit of risk. If you would invest 1,012,000 in Asiana Airlines on October 17, 2024 and sell it today you would earn a total of 53,000 from holding Asiana Airlines or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. POSCO Holdings
Performance |
| Timeline |
| Asiana Airlines |
| POSCO Holdings |
Asiana Airlines and POSCO Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and POSCO Holdings
The main advantage of trading using opposite Asiana Airlines and POSCO Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, POSCO Holdings 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 POSCO Holdings will offset losses from the drop in POSCO Holdings' long position.| Asiana Airlines vs. Hotel Shilla Co | Asiana Airlines vs. PlayD Co | Asiana Airlines vs. Alton Sports CoLtd | Asiana Airlines vs. PLAYWITH |
| POSCO Holdings vs. Foodnamoo | POSCO Holdings vs. Samlip General Foods | POSCO Holdings vs. Jeju Semiconductor Corp | POSCO Holdings vs. Asiana Airlines |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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