Correlation Between Dongwoo Farm and Korean Air
Can any of the company-specific risk be diversified away by investing in both Dongwoo Farm 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 Dongwoo Farm and Korean Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongwoo Farm To and Korean Air Lines, you can compare the effects of market volatilities on Dongwoo Farm 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 Dongwoo Farm with a short position of Korean Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongwoo Farm and Korean Air.
Diversification Opportunities for Dongwoo Farm and Korean Air
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Dongwoo and Korean is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Dongwoo Farm To 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 Dongwoo Farm 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 Dongwoo Farm To 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 Dongwoo Farm i.e., Dongwoo Farm and Korean Air go up and down completely randomly.
Pair Corralation between Dongwoo Farm and Korean Air
Assuming the 90 days trading horizon Dongwoo Farm To is expected to generate 0.3 times more return on investment than Korean Air. However, Dongwoo Farm To is 3.37 times less risky than Korean Air. It trades about 0.54 of its potential returns per unit of risk. Korean Air Lines is currently generating about -0.09 per unit of risk. If you would invest 188,043 in Dongwoo Farm To on October 12, 2024 and sell it today you would earn a total of 11,657 from holding Dongwoo Farm To or generate 6.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongwoo Farm To vs. Korean Air Lines
Performance |
| Timeline |
| Dongwoo Farm To |
| Korean Air Lines |
Dongwoo Farm and Korean Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongwoo Farm and Korean Air
The main advantage of trading using opposite Dongwoo Farm and Korean Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongwoo Farm 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.| Dongwoo Farm vs. Vitzro Tech Co | Dongwoo Farm vs. Youngsin Metal Industrial | Dongwoo Farm vs. Dongbang Transport Logistics | Dongwoo Farm vs. Hanjoo Light Metal |
| 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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