Correlation Between Asiana Airlines and Korea Petro
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and Korea Petro 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 Korea Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and Korea Petro Chemical, you can compare the effects of market volatilities on Asiana Airlines and Korea Petro 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 Korea Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and Korea Petro.
Diversification Opportunities for Asiana Airlines and Korea Petro
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asiana and Korea is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and Korea Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Petro Chemical 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 Korea Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Petro Chemical has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and Korea Petro go up and down completely randomly.
Pair Corralation between Asiana Airlines and Korea Petro
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 0.69 times more return on investment than Korea Petro. However, Asiana Airlines is 1.45 times less risky than Korea Petro. It trades about 0.01 of its potential returns per unit of risk. Korea Petro Chemical is currently generating about -0.06 per unit of risk. If you would invest 1,032,000 in Asiana Airlines on August 25, 2024 and sell it today you would earn a total of 9,000 from holding Asiana Airlines or generate 0.87% 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. Korea Petro Chemical
Performance |
| Timeline |
| Asiana Airlines |
| Korea Petro Chemical |
Asiana Airlines and Korea Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and Korea Petro
The main advantage of trading using opposite Asiana Airlines and Korea Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, Korea Petro 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 Korea Petro will offset losses from the drop in Korea Petro's long position.| Asiana Airlines vs. CJ Seafood Corp | Asiana Airlines vs. Ssangyong Information Communication | Asiana Airlines vs. Hankukpackage Co | Asiana Airlines vs. Organic Special Pet |
| Korea Petro vs. MediaZen | Korea Petro vs. Asiana Airlines | Korea Petro vs. Daiyang Metal Co | Korea Petro vs. Samhwa Paint Industrial |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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