Correlation Between NewFlex Technology and Korean Air
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology 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 NewFlex Technology and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and Korean Air Lines, you can compare the effects of market volatilities on NewFlex Technology 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 NewFlex Technology with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Korean Air.
Diversification Opportunities for NewFlex Technology and Korean Air
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NewFlex and Korean is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology 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 NewFlex Technology i.e., NewFlex Technology and Korean Air go up and down completely randomly.
Pair Corralation between NewFlex Technology and Korean Air
Assuming the 90 days trading horizon NewFlex Technology Co is expected to under-perform the Korean Air. In addition to that, NewFlex Technology is 2.93 times more volatile than Korean Air Lines. It trades about 0.0 of its total potential returns per unit of risk. Korean Air Lines is currently generating about 0.02 per unit of volatility. If you would invest 2,398,447 in Korean Air Lines on September 3, 2024 and sell it today you would earn a total of 196,553 from holding Korean Air Lines or generate 8.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Korean Air Lines
Performance |
| Timeline |
| NewFlex Technology |
| Korean Air Lines |
NewFlex Technology and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Korean Air
The main advantage of trading using opposite NewFlex Technology and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology 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.| NewFlex Technology vs. Dongsin Engineering Construction | NewFlex Technology vs. Doosan Fuel Cell | NewFlex Technology vs. Daishin Balance 1 | NewFlex Technology vs. Total Soft Bank |
| Korean Air vs. INFINITT Healthcare Co | Korean Air vs. Daiyang Metal Co | Korean Air vs. Youngsin Metal Industrial | Korean Air vs. Osang Healthcare Co,Ltd |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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