Correlation Between Korea Information and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Korea Information 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 Korea Information and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Information Communications and Asiana Airlines, you can compare the effects of market volatilities on Korea Information 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 Korea Information with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Information and Asiana Airlines.
Diversification Opportunities for Korea Information and Asiana Airlines
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Korea and Asiana is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Korea Information Communicatio and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and Korea Information 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 Korea Information Communications 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 Korea Information i.e., Korea Information and Asiana Airlines go up and down completely randomly.
Pair Corralation between Korea Information and Asiana Airlines
Assuming the 90 days trading horizon Korea Information is expected to generate 3.58 times less return on investment than Asiana Airlines. But when comparing it to its historical volatility, Korea Information Communications is 1.05 times less risky than Asiana Airlines. It trades about 0.1 of its potential returns per unit of risk. Asiana Airlines is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 994,000 in Asiana Airlines on October 25, 2024 and sell it today you would earn a total of 62,000 from holding Asiana Airlines or generate 6.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Information Communicatio vs. Asiana Airlines
Performance |
| Timeline |
| Korea Information |
| Asiana Airlines |
Korea Information and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Information and Asiana Airlines
The main advantage of trading using opposite Korea Information and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Information 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.| Korea Information vs. Samsung Electronics Co | Korea Information vs. Samsung Electronics Co | Korea Information vs. SK Hynix | Korea Information vs. HMM Co |
| Asiana Airlines vs. ECSTELECOM Co | Asiana Airlines vs. Hankuk Steel Wire | Asiana Airlines vs. Korea Information Communications | Asiana Airlines vs. Wonil Special Steel |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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