Correlation Between Shinsegae Food and Korean Air
Can any of the company-specific risk be diversified away by investing in both Shinsegae Food 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 Shinsegae Food and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shinsegae Food and Korean Air Lines, you can compare the effects of market volatilities on Shinsegae Food 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 Shinsegae Food with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shinsegae Food and Korean Air.
Diversification Opportunities for Shinsegae Food and Korean Air
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Shinsegae and Korean is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Shinsegae Food 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 Shinsegae Food 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 Shinsegae Food 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 Shinsegae Food i.e., Shinsegae Food and Korean Air go up and down completely randomly.
Pair Corralation between Shinsegae Food and Korean Air
Assuming the 90 days trading horizon Shinsegae Food is expected to under-perform the Korean Air. In addition to that, Shinsegae Food is 1.03 times more volatile than Korean Air Lines. It trades about -0.05 of its total potential returns per unit of risk. Korean Air Lines is currently generating about 0.03 per unit of volatility. If you would invest 2,257,188 in Korean Air Lines on September 12, 2024 and sell it today you would earn a total of 167,812 from holding Korean Air Lines or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shinsegae Food vs. Korean Air Lines
Performance |
| Timeline |
| Shinsegae Food |
| Korean Air Lines |
Shinsegae Food and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shinsegae Food and Korean Air
The main advantage of trading using opposite Shinsegae Food and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shinsegae Food 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.| Shinsegae Food vs. Daou Data Corp | Shinsegae Food vs. Solution Advanced Technology | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. Busan Ind |
| Korean Air vs. Korea New Network | Korean Air vs. Solution Advanced Technology | Korean Air vs. Busan Industrial Co | Korean Air vs. Busan Ind |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |