Correlation Between Asiana Airlines and Kuk Young
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and Kuk Young 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 Kuk Young into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and Kuk Young GM, you can compare the effects of market volatilities on Asiana Airlines and Kuk Young 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 Kuk Young. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and Kuk Young.
Diversification Opportunities for Asiana Airlines and Kuk Young
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asiana and Kuk is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and Kuk Young GM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kuk Young GM 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 Kuk Young. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kuk Young GM has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and Kuk Young go up and down completely randomly.
Pair Corralation between Asiana Airlines and Kuk Young
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 3.14 times less return on investment than Kuk Young. But when comparing it to its historical volatility, Asiana Airlines is 3.65 times less risky than Kuk Young. It trades about 0.16 of its potential returns per unit of risk. Kuk Young GM is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 187,400 in Kuk Young GM on August 25, 2024 and sell it today you would earn a total of 36,100 from holding Kuk Young GM or generate 19.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. Kuk Young GM
Performance |
| Timeline |
| Asiana Airlines |
| Kuk Young GM |
Asiana Airlines and Kuk Young Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and Kuk Young
The main advantage of trading using opposite Asiana Airlines and Kuk Young positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, Kuk Young 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 Kuk Young will offset losses from the drop in Kuk Young's long position.| Asiana Airlines vs. AptaBio Therapeutics | Asiana Airlines vs. Daewoo SBI SPAC | Asiana Airlines vs. Dream Security co | Asiana Airlines vs. Microfriend |
| Kuk Young vs. Korea Information Communications | Kuk Young vs. Automobile Pc | Kuk Young vs. Golden Bridge Investment | Kuk Young 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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