Correlation Between Korea Aerospace and Green Cross
Can any of the company-specific risk be diversified away by investing in both Korea Aerospace and Green Cross 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 Green Cross 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 Green Cross Lab, you can compare the effects of market volatilities on Korea Aerospace and Green Cross 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 Green Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Aerospace and Green Cross.
Diversification Opportunities for Korea Aerospace and Green Cross
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Korea and Green is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Korea Aerospace Industries and Green Cross Lab in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Cross Lab 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 Green Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Cross Lab has no effect on the direction of Korea Aerospace i.e., Korea Aerospace and Green Cross go up and down completely randomly.
Pair Corralation between Korea Aerospace and Green Cross
Assuming the 90 days trading horizon Korea Aerospace Industries is expected to generate 1.11 times more return on investment than Green Cross. However, Korea Aerospace is 1.11 times more volatile than Green Cross Lab. It trades about 0.01 of its potential returns per unit of risk. Green Cross Lab is currently generating about -0.46 per unit of risk. If you would invest 5,850,000 in Korea Aerospace Industries on September 1, 2024 and sell it today you would lose (10,000) from holding Korea Aerospace Industries or give up 0.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Aerospace Industries vs. Green Cross Lab
Performance |
| Timeline |
| Korea Aerospace Indu |
| Green Cross Lab |
Korea Aerospace and Green Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Aerospace and Green Cross
The main advantage of trading using opposite Korea Aerospace and Green Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Aerospace position performs unexpectedly, Green Cross 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 Green Cross will offset losses from the drop in Green Cross' long position.| Korea Aerospace vs. Bookook Steel | Korea Aerospace vs. Cube Entertainment | Korea Aerospace vs. Kaonmedia Co | Korea Aerospace vs. Jeil Steel Mfg |
| Green Cross vs. SK Bioscience Co | Green Cross vs. MedPacto | Green Cross vs. Prestige Biologics Co | Green Cross vs. OliX PharmaceuticalsInc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |