Correlation Between Asiana Airlines and SBI Investment
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and SBI Investment 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 SBI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and SBI Investment KOREA, you can compare the effects of market volatilities on Asiana Airlines and SBI Investment 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 SBI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and SBI Investment.
Diversification Opportunities for Asiana Airlines and SBI Investment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Asiana and SBI is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and SBI Investment KOREA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Investment KOREA 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 SBI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Investment KOREA has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and SBI Investment go up and down completely randomly.
Pair Corralation between Asiana Airlines and SBI Investment
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 0.61 times more return on investment than SBI Investment. However, Asiana Airlines is 1.63 times less risky than SBI Investment. It trades about 0.06 of its potential returns per unit of risk. SBI Investment KOREA is currently generating about -0.05 per unit of risk. If you would invest 1,040,000 in Asiana Airlines on November 30, 2024 and sell it today you would earn a total of 28,000 from holding Asiana Airlines or generate 2.69% 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. SBI Investment KOREA
Performance |
| Timeline |
| Asiana Airlines |
| SBI Investment KOREA |
Asiana Airlines and SBI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and SBI Investment
The main advantage of trading using opposite Asiana Airlines and SBI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, SBI Investment 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 SBI Investment will offset losses from the drop in SBI Investment's long position.| Asiana Airlines vs. Wonil Special Steel | Asiana Airlines vs. Husteel | Asiana Airlines vs. Lotte Rental Co | Asiana Airlines vs. Fine Besteel Co |
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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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