Correlation Between MEDIPOST and Korean Air
Can any of the company-specific risk be diversified away by investing in both MEDIPOST and Korean 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 MEDIPOST and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDIPOST Co and Korean Air Lines, you can compare the effects of market volatilities on MEDIPOST and Korean 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 MEDIPOST with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDIPOST and Korean Air.
Diversification Opportunities for MEDIPOST and Korean Air
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between MEDIPOST and Korean is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding MEDIPOST Co and Korean Air Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korean Air Lines and MEDIPOST 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 MEDIPOST Co are associated (or correlated) with Korean Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korean Air Lines has no effect on the direction of MEDIPOST i.e., MEDIPOST and Korean Air go up and down completely randomly.
Pair Corralation between MEDIPOST and Korean Air
Assuming the 90 days trading horizon MEDIPOST is expected to generate 3.82 times less return on investment than Korean Air. In addition to that, MEDIPOST is 2.56 times more volatile than Korean Air Lines. It trades about 0.03 of its total potential returns per unit of risk. Korean Air Lines is currently generating about 0.28 per unit of volatility. If you would invest 2,260,000 in Korean Air Lines on October 29, 2024 and sell it today you would earn a total of 200,000 from holding Korean Air Lines or generate 8.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDIPOST Co vs. Korean Air Lines
Performance |
| Timeline |
| MEDIPOST |
| Korean Air Lines |
MEDIPOST and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDIPOST and Korean Air
The main advantage of trading using opposite MEDIPOST and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDIPOST position performs unexpectedly, Korean 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 Korean Air will offset losses from the drop in Korean Air's long position.| MEDIPOST vs. GS Retail Co | MEDIPOST vs. DONGKUK TED METAL | MEDIPOST vs. Duksan Hi Metal | MEDIPOST vs. Formetal Co |
| Korean Air vs. Automobile Pc | Korean Air vs. Shinhan Financial Group | Korean Air vs. DoubleU Games Co | Korean Air vs. Sempio Foods 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Stocks Directory Find actively traded stocks across global markets |