Correlation Between Asiana Airlines and NICE Information
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and NICE Information 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 NICE Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and NICE Information Service, you can compare the effects of market volatilities on Asiana Airlines and NICE Information 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 NICE Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and NICE Information.
Diversification Opportunities for Asiana Airlines and NICE Information
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asiana and NICE is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and NICE Information Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NICE Information Service 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 NICE Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NICE Information Service has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and NICE Information go up and down completely randomly.
Pair Corralation between Asiana Airlines and NICE Information
Assuming the 90 days trading horizon Asiana Airlines is expected to under-perform the NICE Information. But the stock apears to be less risky and, when comparing its historical volatility, Asiana Airlines is 1.02 times less risky than NICE Information. The stock trades about -0.02 of its potential returns per unit of risk. The NICE Information Service is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,206,000 in NICE Information Service on October 30, 2024 and sell it today you would earn a total of 54,000 from holding NICE Information Service or generate 4.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. NICE Information Service
Performance |
| Timeline |
| Asiana Airlines |
| NICE Information Service |
Asiana Airlines and NICE Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and NICE Information
The main advantage of trading using opposite Asiana Airlines and NICE Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, NICE Information 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 NICE Information will offset losses from the drop in NICE Information's long position.| Asiana Airlines vs. PJ Metal Co | Asiana Airlines vs. Seoyon Topmetal Co | Asiana Airlines vs. Daelim Trading Co | Asiana Airlines vs. E Investment Development |
| NICE Information vs. Kyung In Synthetic Corp | NICE Information vs. Pureun Mutual Savings | NICE Information vs. Samyung Trading Co | NICE Information vs. Clean Science co |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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