Correlation Between Dongil Steel and Korea Air
Can any of the company-specific risk be diversified away by investing in both Dongil Steel and Korea Air 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 Dongil Steel and Korea Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongil Steel Co and Korea Air Svc, you can compare the effects of market volatilities on Dongil Steel and Korea Air 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 Dongil Steel with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongil Steel and Korea Air.
Diversification Opportunities for Dongil Steel and Korea Air
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Dongil and Korea is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Dongil Steel Co and Korea Air Svc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Air Svc and Dongil Steel 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 Dongil Steel Co are associated (or correlated) with Korea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Air Svc has no effect on the direction of Dongil Steel i.e., Dongil Steel and Korea Air go up and down completely randomly.
Pair Corralation between Dongil Steel and Korea Air
Assuming the 90 days trading horizon Dongil Steel Co is expected to under-perform the Korea Air. But the stock apears to be less risky and, when comparing its historical volatility, Dongil Steel Co is 1.97 times less risky than Korea Air. The stock trades about -0.25 of its potential returns per unit of risk. The Korea Air Svc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 5,620,000 in Korea Air Svc on August 29, 2024 and sell it today you would earn a total of 80,000 from holding Korea Air Svc or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongil Steel Co vs. Korea Air Svc
Performance |
| Timeline |
| Dongil Steel |
| Korea Air Svc |
Dongil Steel and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongil Steel and Korea Air
The main advantage of trading using opposite Dongil Steel and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongil Steel position performs unexpectedly, Korea Air 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 Korea Air will offset losses from the drop in Korea Air's long position.| Dongil Steel vs. Keum Kang Steel | Dongil Steel vs. Tplex Co | Dongil Steel vs. PJ Metal Co | Dongil Steel vs. Samhyun Steel Co |
| Korea Air vs. SBI Investment KOREA | Korea Air vs. Stic Investments | Korea Air vs. E Investment Development | Korea Air vs. NH Investment Securities |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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