Correlation Between Asiana Airlines and Seah Steel
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and Seah Steel 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 Seah Steel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and Seah Steel Corp, you can compare the effects of market volatilities on Asiana Airlines and Seah Steel 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 Seah Steel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and Seah Steel.
Diversification Opportunities for Asiana Airlines and Seah Steel
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Asiana and Seah is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and Seah Steel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seah Steel Corp 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 Seah Steel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seah Steel Corp has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and Seah Steel go up and down completely randomly.
Pair Corralation between Asiana Airlines and Seah Steel
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 1.05 times more return on investment than Seah Steel. However, Asiana Airlines is 1.05 times more volatile than Seah Steel Corp. It trades about 0.23 of its potential returns per unit of risk. Seah Steel Corp is currently generating about 0.05 per unit of risk. If you would invest 994,000 in Asiana Airlines on August 29, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asiana Airlines vs. Seah Steel Corp
Performance |
| Timeline |
| Asiana Airlines |
| Seah Steel Corp |
Asiana Airlines and Seah Steel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asiana Airlines and Seah Steel
The main advantage of trading using opposite Asiana Airlines and Seah Steel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, Seah Steel 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 Seah Steel will offset losses from the drop in Seah Steel'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 |
| Seah Steel vs. Cuckoo Electronics Co | Seah Steel vs. KyungIn Electronics Co | Seah Steel vs. Genie Music | Seah Steel vs. Duksan Hi Metal |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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