Correlation Between Asiana Airlines and Dgb Financial
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and Dgb Financial 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 Dgb Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and Dgb Financial, you can compare the effects of market volatilities on Asiana Airlines and Dgb Financial 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 Dgb Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and Dgb Financial.
Diversification Opportunities for Asiana Airlines and Dgb Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Asiana and Dgb is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial 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 Dgb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgb Financial has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and Dgb Financial go up and down completely randomly.
Pair Corralation between Asiana Airlines and Dgb Financial
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 3.01 times more return on investment than Dgb Financial. However, Asiana Airlines is 3.01 times more volatile than Dgb Financial. It trades about 0.23 of its potential returns per unit of risk. Dgb Financial is currently generating about 0.25 per unit of risk. If you would invest 994,000 in Asiana Airlines on August 28, 2024 and sell it today you would earn a total of 105,000 from holding Asiana Airlines or generate 10.56% 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. Dgb Financial
Performance |
| Timeline |
| Asiana Airlines |
| Dgb Financial |
Asiana Airlines and Dgb Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and Dgb Financial
The main advantage of trading using opposite Asiana Airlines and Dgb Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, Dgb Financial 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 Dgb Financial will offset losses from the drop in Dgb Financial's long position.| Asiana Airlines vs. Home Center Holdings | Asiana Airlines vs. Hyunwoo Industrial Co | Asiana Airlines vs. Daelim Industrial Co | Asiana Airlines vs. Seoyon Topmetal Co |
| Dgb Financial vs. Korea New Network | Dgb Financial vs. Dong A Eltek | Dgb Financial vs. Dreamus Company | Dgb Financial vs. SK Bioscience 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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