Correlation Between Tway Air and Jin Air
Can any of the company-specific risk be diversified away by investing in both Tway Air and Jin 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 Tway Air and Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tway Air Co and Jin Air Co, you can compare the effects of market volatilities on Tway Air and Jin 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 Tway Air with a short position of Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tway Air and Jin Air.
Diversification Opportunities for Tway Air and Jin Air
Very weak diversification
The 3 months correlation between Tway and Jin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Tway Air Co and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air and Tway Air 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 Tway Air Co are associated (or correlated) with Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of Tway Air i.e., Tway Air and Jin Air go up and down completely randomly.
Pair Corralation between Tway Air and Jin Air
Assuming the 90 days trading horizon Tway Air Co is expected to generate 1.4 times more return on investment than Jin Air. However, Tway Air is 1.4 times more volatile than Jin Air Co. It trades about 0.04 of its potential returns per unit of risk. Jin Air Co is currently generating about -0.02 per unit of risk. If you would invest 200,000 in Tway Air Co on August 24, 2024 and sell it today you would earn a total of 88,000 from holding Tway Air Co or generate 44.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tway Air Co vs. Jin Air Co
Performance |
| Timeline |
| Tway Air |
| Jin Air |
Tway Air and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tway Air and Jin Air
The main advantage of trading using opposite Tway Air and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tway Air position performs unexpectedly, Jin 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 Jin Air will offset losses from the drop in Jin Air's long position.| Tway Air vs. Jin Air Co | Tway Air vs. Busan Industrial Co | Tway Air vs. Busan Ind | Tway Air vs. Mirae Asset Daewoo |
| Jin Air vs. Korea Shipbuilding Offshore | Jin Air vs. Nable Communications | Jin Air vs. Lotte Data Communication | Jin Air vs. Woori Technology |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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