Correlation Between Korea Aerospace and LEADCORP
Can any of the company-specific risk be diversified away by investing in both Korea Aerospace and LEADCORP 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 Aerospace and LEADCORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Aerospace Industries and The LEADCORP, you can compare the effects of market volatilities on Korea Aerospace and LEADCORP 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 Aerospace with a short position of LEADCORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Aerospace and LEADCORP.
Diversification Opportunities for Korea Aerospace and LEADCORP
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Korea and LEADCORP is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Korea Aerospace Industries and The LEADCORP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEADCORP and Korea Aerospace 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 Aerospace Industries are associated (or correlated) with LEADCORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEADCORP has no effect on the direction of Korea Aerospace i.e., Korea Aerospace and LEADCORP go up and down completely randomly.
Pair Corralation between Korea Aerospace and LEADCORP
Assuming the 90 days trading horizon Korea Aerospace Industries is expected to generate 3.51 times more return on investment than LEADCORP. However, Korea Aerospace is 3.51 times more volatile than The LEADCORP. It trades about 0.21 of its potential returns per unit of risk. The LEADCORP is currently generating about 0.24 per unit of risk. If you would invest 5,330,000 in Korea Aerospace Industries on November 27, 2024 and sell it today you would earn a total of 660,000 from holding Korea Aerospace Industries or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Aerospace Industries vs. The LEADCORP
Performance |
| Timeline |
| Korea Aerospace Indu |
| LEADCORP |
Korea Aerospace and LEADCORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Aerospace and LEADCORP
The main advantage of trading using opposite Korea Aerospace and LEADCORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Aerospace position performs unexpectedly, LEADCORP 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 LEADCORP will offset losses from the drop in LEADCORP's long position.| Korea Aerospace vs. LB Investment | Korea Aerospace vs. Nable Communications | Korea Aerospace vs. KT Submarine Telecom | Korea Aerospace vs. Nice Information Telecommunication |
| LEADCORP vs. Vitzro Tech Co | LEADCORP vs. RFTech Co | LEADCORP vs. Hwangkum Steel Technology | LEADCORP vs. Amogreentech 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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