Correlation Between PLAYWITH and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both PLAYWITH and Asiana Airlines 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 PLAYWITH and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYWITH and Asiana Airlines, you can compare the effects of market volatilities on PLAYWITH and Asiana Airlines 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 PLAYWITH with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYWITH and Asiana Airlines.
Diversification Opportunities for PLAYWITH and Asiana Airlines
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLAYWITH and Asiana is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWITH and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and PLAYWITH 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 PLAYWITH are associated (or correlated) with Asiana Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiana Airlines has no effect on the direction of PLAYWITH i.e., PLAYWITH and Asiana Airlines go up and down completely randomly.
Pair Corralation between PLAYWITH and Asiana Airlines
Assuming the 90 days trading horizon PLAYWITH is expected to under-perform the Asiana Airlines. In addition to that, PLAYWITH is 1.5 times more volatile than Asiana Airlines. It trades about -0.26 of its total potential returns per unit of risk. Asiana Airlines is currently generating about 0.24 per unit of volatility. If you would invest 1,012,000 in Asiana Airlines on October 17, 2024 and sell it today you would earn a total of 53,000 from holding Asiana Airlines or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYWITH vs. Asiana Airlines
Performance |
| Timeline |
| PLAYWITH |
| Asiana Airlines |
PLAYWITH and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYWITH and Asiana Airlines
The main advantage of trading using opposite PLAYWITH and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYWITH position performs unexpectedly, Asiana Airlines 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 Asiana Airlines will offset losses from the drop in Asiana Airlines' long position.| PLAYWITH vs. Sam Yang Foods | PLAYWITH vs. Foodnamoo | PLAYWITH vs. Daehan Steel | PLAYWITH vs. Samhyun Steel Co |
| Asiana Airlines vs. Hotel Shilla Co | Asiana Airlines vs. PlayD Co | Asiana Airlines vs. Alton Sports CoLtd | Asiana Airlines vs. PLAYWITH |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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