Correlation Between Asiana Airlines and DC Media
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and DC Media 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 DC Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and DC Media Co, you can compare the effects of market volatilities on Asiana Airlines and DC Media 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 DC Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and DC Media.
Diversification Opportunities for Asiana Airlines and DC Media
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Asiana and 263720 is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and DC Media Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DC Media 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 DC Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DC Media has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and DC Media go up and down completely randomly.
Pair Corralation between Asiana Airlines and DC Media
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 0.41 times more return on investment than DC Media. However, Asiana Airlines is 2.46 times less risky than DC Media. It trades about 0.0 of its potential returns per unit of risk. DC Media Co is currently generating about -0.02 per unit of risk. If you would invest 1,110,000 in Asiana Airlines on September 3, 2024 and sell it today you would lose (36,000) from holding Asiana Airlines or give up 3.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. DC Media Co
Performance |
| Timeline |
| Asiana Airlines |
| DC Media |
Asiana Airlines and DC Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and DC Media
The main advantage of trading using opposite Asiana Airlines and DC Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, DC Media 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 DC Media will offset losses from the drop in DC Media's long position.| Asiana Airlines vs. AptaBio Therapeutics | Asiana Airlines vs. Daewoo SBI SPAC | Asiana Airlines vs. Dream Security co | Asiana Airlines vs. Microfriend |
| DC Media vs. DC Media CoLtd | DC Media vs. Busan Industrial Co | DC Media vs. UNISEM Co | DC Media vs. RPBio Inc |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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