Correlation Between Asiana Airlines and ENERGYMACHINERY KOREA
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and ENERGYMACHINERY KOREA CoLtd, you can compare the effects of market volatilities on Asiana Airlines and ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and ENERGYMACHINERY KOREA.
Diversification Opportunities for Asiana Airlines and ENERGYMACHINERY KOREA
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Asiana and ENERGYMACHINERY is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and ENERGYMACHINERY KOREA CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENERGYMACHINERY 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 ENERGYMACHINERY KOREA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENERGYMACHINERY KOREA has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and ENERGYMACHINERY KOREA go up and down completely randomly.
Pair Corralation between Asiana Airlines and ENERGYMACHINERY KOREA
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 0.59 times more return on investment than ENERGYMACHINERY KOREA. However, Asiana Airlines is 1.7 times less risky than ENERGYMACHINERY KOREA. It trades about 0.29 of its potential returns per unit of risk. ENERGYMACHINERY KOREA CoLtd is currently generating about 0.08 per unit of risk. If you would invest 1,000,000 in Asiana Airlines on October 24, 2024 and sell it today you would earn a total of 56,000 from holding Asiana Airlines or generate 5.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. ENERGYMACHINERY KOREA CoLtd
Performance |
| Timeline |
| Asiana Airlines |
| ENERGYMACHINERY KOREA |
Asiana Airlines and ENERGYMACHINERY KOREA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and ENERGYMACHINERY KOREA
The main advantage of trading using opposite Asiana Airlines and ENERGYMACHINERY KOREA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, ENERGYMACHINERY KOREA 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 ENERGYMACHINERY KOREA will offset losses from the drop in ENERGYMACHINERY KOREA's long position.| Asiana Airlines vs. DB Insurance Co | Asiana Airlines vs. Samick Musical Instruments | Asiana Airlines vs. KakaoBank Corp | Asiana Airlines vs. Shinhan Financial Group |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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