Correlation Between Asiana Airlines and Woori Technology
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and Woori Technology 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 Woori Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and Woori Technology Investment, you can compare the effects of market volatilities on Asiana Airlines and Woori Technology 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 Woori Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and Woori Technology.
Diversification Opportunities for Asiana Airlines and Woori Technology
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asiana and Woori is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and Woori Technology Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Woori Technology Inv 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 Woori Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Woori Technology Inv has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and Woori Technology go up and down completely randomly.
Pair Corralation between Asiana Airlines and Woori Technology
Assuming the 90 days trading horizon Asiana Airlines is expected to under-perform the Woori Technology. But the stock apears to be less risky and, when comparing its historical volatility, Asiana Airlines is 2.34 times less risky than Woori Technology. The stock trades about 0.0 of its potential returns per unit of risk. The Woori Technology Investment is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 830,000 in Woori Technology Investment on September 3, 2024 and sell it today you would earn a total of 48,000 from holding Woori Technology Investment or generate 5.78% 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. Woori Technology Investment
Performance |
| Timeline |
| Asiana Airlines |
| Woori Technology Inv |
Asiana Airlines and Woori Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and Woori Technology
The main advantage of trading using opposite Asiana Airlines and Woori Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, Woori Technology 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 Woori Technology will offset losses from the drop in Woori Technology's long position.| Asiana Airlines vs. AptaBio Therapeutics | Asiana Airlines vs. Daewoo SBI SPAC | Asiana Airlines vs. Dream Security co | Asiana Airlines vs. Microfriend |
| Woori Technology vs. Humasis Co | Woori Technology vs. JUSUNG ENGINEERING Co | Woori Technology vs. Winix Inc | Woori Technology vs. AfreecaTV 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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