Correlation Between Sungdo Engineering and Korea Air
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering 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 Sungdo Engineering and Korea Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungdo Engineering Construction and Korea Air Svc, you can compare the effects of market volatilities on Sungdo Engineering 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 Sungdo Engineering with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and Korea Air.
Diversification Opportunities for Sungdo Engineering and Korea Air
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sungdo and Korea is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio 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 Sungdo Engineering 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 Sungdo Engineering Construction 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 Sungdo Engineering i.e., Sungdo Engineering and Korea Air go up and down completely randomly.
Pair Corralation between Sungdo Engineering and Korea Air
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to generate 1.27 times more return on investment than Korea Air. However, Sungdo Engineering is 1.27 times more volatile than Korea Air Svc. It trades about 0.04 of its potential returns per unit of risk. Korea Air Svc is currently generating about -0.02 per unit of risk. If you would invest 386,000 in Sungdo Engineering Construction on September 3, 2024 and sell it today you would earn a total of 44,000 from holding Sungdo Engineering Construction or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. Korea Air Svc
Performance |
| Timeline |
| Sungdo Engineering |
| Korea Air Svc |
Sungdo Engineering and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and Korea Air
The main advantage of trading using opposite Sungdo Engineering and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering 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.| Sungdo Engineering vs. LG Display | Sungdo Engineering vs. Hyundai Motor | Sungdo Engineering vs. Hyundai Motor Co | Sungdo Engineering vs. Hyundai Motor Co |
| Korea Air vs. Incar Financial Service | Korea Air vs. Jeju Bank | Korea Air vs. DB Financial Investment | Korea Air vs. Wireless Power Amplifier |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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