Correlation Between GemVaxKAEL CoLtd and Korean Air
Can any of the company-specific risk be diversified away by investing in both GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GemVaxKAEL CoLtd and Korean Air Lines, you can compare the effects of market volatilities on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of GemVaxKAEL CoLtd and Korean Air.
Diversification Opportunities for GemVaxKAEL CoLtd and Korean Air
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GemVaxKAEL and Korean is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd i.e., GemVaxKAEL CoLtd and Korean Air go up and down completely randomly.
Pair Corralation between GemVaxKAEL CoLtd and Korean Air
Assuming the 90 days trading horizon GemVaxKAEL CoLtd is expected to generate 2.5 times more return on investment than Korean Air. However, GemVaxKAEL CoLtd is 2.5 times more volatile than Korean Air Lines. It trades about 0.03 of its potential returns per unit of risk. Korean Air Lines is currently generating about 0.01 per unit of risk. If you would invest 1,430,000 in GemVaxKAEL CoLtd on October 12, 2024 and sell it today you would earn a total of 244,000 from holding GemVaxKAEL CoLtd or generate 17.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GemVaxKAEL CoLtd vs. Korean Air Lines
Performance |
| Timeline |
| GemVaxKAEL CoLtd |
| Korean Air Lines |
GemVaxKAEL CoLtd and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GemVaxKAEL CoLtd and Korean Air
The main advantage of trading using opposite GemVaxKAEL CoLtd and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GemVaxKAEL CoLtd 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.| GemVaxKAEL CoLtd vs. Samlip General Foods | GemVaxKAEL CoLtd vs. Korean Drug Co | GemVaxKAEL CoLtd vs. Daechang Steel Co | GemVaxKAEL CoLtd vs. Hyundai Home Shopping |
| Korean Air vs. Dongwoo Farm To | Korean Air vs. KEPCO Engineering Construction | Korean Air vs. GS Engineering Construction | Korean Air vs. Nam Hwa Construction |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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