Correlation Between Display Tech and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Display Tech and Asiana Airlines 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 Display Tech and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Display Tech Co and Asiana Airlines, you can compare the effects of market volatilities on Display Tech and Asiana Airlines 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 Display Tech with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Display Tech and Asiana Airlines.
Diversification Opportunities for Display Tech and Asiana Airlines
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Display and Asiana is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Display Tech Co and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and Display Tech 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 Display Tech Co are associated (or correlated) with Asiana Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiana Airlines has no effect on the direction of Display Tech i.e., Display Tech and Asiana Airlines go up and down completely randomly.
Pair Corralation between Display Tech and Asiana Airlines
Assuming the 90 days trading horizon Display Tech Co is expected to generate 1.42 times more return on investment than Asiana Airlines. However, Display Tech is 1.42 times more volatile than Asiana Airlines. It trades about 0.18 of its potential returns per unit of risk. Asiana Airlines is currently generating about 0.11 per unit of risk. If you would invest 290,000 in Display Tech Co on October 13, 2024 and sell it today you would earn a total of 16,500 from holding Display Tech Co or generate 5.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Display Tech Co vs. Asiana Airlines
Performance |
| Timeline |
| Display Tech |
| Asiana Airlines |
Display Tech and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Display Tech and Asiana Airlines
The main advantage of trading using opposite Display Tech and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Display Tech position performs unexpectedly, Asiana Airlines 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 Asiana Airlines will offset losses from the drop in Asiana Airlines' long position.| Display Tech vs. PI Advanced Materials | Display Tech vs. Hyundai Engineering Plastics | Display Tech vs. National Plastic Co | Display Tech vs. Seoul Electronics Telecom |
| Asiana Airlines vs. Sangsin Energy Display | Asiana Airlines vs. Digital Power Communications | Asiana Airlines vs. Lotte Data Communication | Asiana Airlines vs. Display Tech 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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