Correlation Between Dongkuk Structures and Korea Air
Can any of the company-specific risk be diversified away by investing in both Dongkuk Structures and Korea 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 Dongkuk Structures and Korea Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dongkuk Structures Construction and Korea Air Svc, you can compare the effects of market volatilities on Dongkuk Structures and Korea 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 Dongkuk Structures with a short position of Korea Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dongkuk Structures and Korea Air.
Diversification Opportunities for Dongkuk Structures and Korea Air
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Dongkuk and Korea is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dongkuk Structures Constructio and Korea Air Svc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Air Svc and Dongkuk Structures 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 Dongkuk Structures Construction are associated (or correlated) with Korea Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Air Svc has no effect on the direction of Dongkuk Structures i.e., Dongkuk Structures and Korea Air go up and down completely randomly.
Pair Corralation between Dongkuk Structures and Korea Air
Assuming the 90 days trading horizon Dongkuk Structures Construction is expected to under-perform the Korea Air. In addition to that, Dongkuk Structures is 1.03 times more volatile than Korea Air Svc. It trades about -0.04 of its total potential returns per unit of risk. Korea Air Svc is currently generating about 0.03 per unit of volatility. If you would invest 4,361,604 in Korea Air Svc on October 13, 2024 and sell it today you would earn a total of 1,048,396 from holding Korea Air Svc or generate 24.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dongkuk Structures Constructio vs. Korea Air Svc
Performance |
| Timeline |
| Dongkuk Structures |
| Korea Air Svc |
Dongkuk Structures and Korea Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dongkuk Structures and Korea Air
The main advantage of trading using opposite Dongkuk Structures and Korea Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dongkuk Structures position performs unexpectedly, Korea 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 Korea Air will offset losses from the drop in Korea Air's long position.| Dongkuk Structures vs. Lotte Data Communication | Dongkuk Structures vs. CG Hi Tech | Dongkuk Structures vs. Iljin Display | Dongkuk Structures vs. Korea Information Communications |
| Korea Air vs. Dongkuk Structures Construction | Korea Air vs. SEOJEON ELECTRIC MACHINERY | Korea Air vs. Sungdo Engineering Construction | Korea Air vs. Digital Power Communications |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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