Correlation Between Asiana Airlines and SK Chemicals
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and SK Chemicals 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 SK Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and SK Chemicals Co, you can compare the effects of market volatilities on Asiana Airlines and SK Chemicals 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 SK Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and SK Chemicals.
Diversification Opportunities for Asiana Airlines and SK Chemicals
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Asiana and 28513K is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and SK Chemicals Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Chemicals 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 SK Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Chemicals has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and SK Chemicals go up and down completely randomly.
Pair Corralation between Asiana Airlines and SK Chemicals
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 1.31 times less return on investment than SK Chemicals. But when comparing it to its historical volatility, Asiana Airlines is 1.8 times less risky than SK Chemicals. It trades about 0.17 of its potential returns per unit of risk. SK Chemicals Co is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 1,888,000 in SK Chemicals Co on October 11, 2024 and sell it today you would earn a total of 112,000 from holding SK Chemicals Co or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. SK Chemicals Co
Performance |
| Timeline |
| Asiana Airlines |
| SK Chemicals |
Asiana Airlines and SK Chemicals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and SK Chemicals
The main advantage of trading using opposite Asiana Airlines and SK Chemicals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, SK Chemicals 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 SK Chemicals will offset losses from the drop in SK Chemicals' long position.| Asiana Airlines vs. Hotel Shilla Co | Asiana Airlines vs. EV Advanced Material | Asiana Airlines vs. Sam Yang Foods | Asiana Airlines vs. Sempio Foods Co |
| SK Chemicals vs. Sung Bo Chemicals | SK Chemicals vs. Jeju Beer Co | SK Chemicals vs. Hankook Furniture Co | SK Chemicals vs. Asiana Airlines |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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