Correlation Between Kukil Metal and Korea Air
Can any of the company-specific risk be diversified away by investing in both Kukil Metal 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 Kukil Metal and Korea Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukil Metal Co and Korea Air Svc, you can compare the effects of market volatilities on Kukil Metal 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 Kukil Metal with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Korea Air.
Diversification Opportunities for Kukil Metal and Korea Air
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kukil and Korea is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co 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 Kukil Metal 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 Kukil Metal Co 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 Kukil Metal i.e., Kukil Metal and Korea Air go up and down completely randomly.
Pair Corralation between Kukil Metal and Korea Air
Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 0.59 times more return on investment than Korea Air. However, Kukil Metal Co is 1.71 times less risky than Korea Air. It trades about 0.14 of its potential returns per unit of risk. Korea Air Svc is currently generating about -0.13 per unit of risk. If you would invest 171,100 in Kukil Metal Co on October 28, 2024 and sell it today you would earn a total of 4,700 from holding Kukil Metal Co or generate 2.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. Korea Air Svc
Performance |
| Timeline |
| Kukil Metal |
| Korea Air Svc |
Kukil Metal and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Korea Air
The main advantage of trading using opposite Kukil Metal and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal 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.| Kukil Metal vs. Hana Materials | Kukil Metal vs. KakaoBank Corp | Kukil Metal vs. Top Material Co | Kukil Metal vs. Shinhan Financial Group |
| Korea Air vs. Samsung Electronics Co | Korea Air vs. Samsung Electronics Co | Korea Air vs. KB Financial Group | Korea Air vs. Shinhan Financial Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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