Correlation Between Taegu Broadcasting and Korea Air
Can any of the company-specific risk be diversified away by investing in both Taegu Broadcasting 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 Taegu Broadcasting and Korea Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taegu Broadcasting and Korea Air Svc, you can compare the effects of market volatilities on Taegu Broadcasting 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 Taegu Broadcasting with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taegu Broadcasting and Korea Air.
Diversification Opportunities for Taegu Broadcasting and Korea Air
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taegu and Korea is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting i.e., Taegu Broadcasting and Korea Air go up and down completely randomly.
Pair Corralation between Taegu Broadcasting and Korea Air
Assuming the 90 days trading horizon Taegu Broadcasting is expected to under-perform the Korea Air. In addition to that, Taegu Broadcasting is 1.06 times more volatile than Korea Air Svc. It trades about -0.41 of its total potential returns per unit of risk. Korea Air Svc is currently generating about -0.37 per unit of volatility. If you would invest 5,730,000 in Korea Air Svc on November 18, 2024 and sell it today you would lose (620,000) from holding Korea Air Svc or give up 10.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taegu Broadcasting vs. Korea Air Svc
Performance |
| Timeline |
| Taegu Broadcasting |
| Korea Air Svc |
Taegu Broadcasting and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taegu Broadcasting and Korea Air
The main advantage of trading using opposite Taegu Broadcasting and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taegu Broadcasting 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.| Taegu Broadcasting vs. Dongnam Chemical Co | Taegu Broadcasting vs. Sungmoon Electronics Co | Taegu Broadcasting vs. Korea Petro Chemical | Taegu Broadcasting vs. Jahwa Electronics Co |
| Korea Air vs. LEENO Industrial | Korea Air vs. Hyundai Industrial Co | Korea Air vs. Korea Industrial Co | Korea Air vs. Kukdo Chemical Co |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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