Correlation Between Humax Holdings and Korean Air
Can any of the company-specific risk be diversified away by investing in both Humax Holdings and Korean 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 Humax Holdings and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Humax Holdings Co and Korean Air Lines, you can compare the effects of market volatilities on Humax Holdings and Korean 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 Humax Holdings with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Humax Holdings and Korean Air.
Diversification Opportunities for Humax Holdings and Korean Air
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Humax and Korean is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Humax Holdings Co and Korean Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Air Lines and Humax Holdings 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 Humax Holdings Co are associated (or correlated) with Korean Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Air Lines has no effect on the direction of Humax Holdings i.e., Humax Holdings and Korean Air go up and down completely randomly.
Pair Corralation between Humax Holdings and Korean Air
Assuming the 90 days trading horizon Humax Holdings Co is expected to generate 4.45 times more return on investment than Korean Air. However, Humax Holdings is 4.45 times more volatile than Korean Air Lines. It trades about 0.3 of its potential returns per unit of risk. Korean Air Lines is currently generating about 0.06 per unit of risk. If you would invest 264,000 in Humax Holdings Co on October 21, 2024 and sell it today you would earn a total of 137,000 from holding Humax Holdings Co or generate 51.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Humax Holdings Co vs. Korean Air Lines
Performance |
| Timeline |
| Humax Holdings |
| Korean Air Lines |
Humax Holdings and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Humax Holdings and Korean Air
The main advantage of trading using opposite Humax Holdings and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Humax Holdings position performs unexpectedly, Korean 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 Korean Air will offset losses from the drop in Korean Air's long position.| Humax Holdings vs. TOPMATERIAL LTD | Humax Holdings vs. Jeju Semiconductor Corp | Humax Holdings vs. Nable Communications | Humax Holdings vs. Solus Advanced Materials |
| Korean Air vs. Kukdong Oil Chemicals | Korean Air vs. ABOV Semiconductor Co | Korean Air vs. Dong A Steel Technology | Korean Air vs. Taegu Broadcasting |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format |