Correlation Between Worldex Industry and Air Busan
Can any of the company-specific risk be diversified away by investing in both Worldex Industry and Air Busan 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 Worldex Industry and Air Busan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Worldex Industry Trading and Air Busan Co, you can compare the effects of market volatilities on Worldex Industry and Air Busan 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 Worldex Industry with a short position of Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Worldex Industry and Air Busan.
Diversification Opportunities for Worldex Industry and Air Busan
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Worldex and Air is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Worldex Industry Trading and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan and Worldex Industry 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 Worldex Industry Trading are associated (or correlated) with Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Worldex Industry i.e., Worldex Industry and Air Busan go up and down completely randomly.
Pair Corralation between Worldex Industry and Air Busan
Assuming the 90 days trading horizon Worldex Industry Trading is expected to generate 0.97 times more return on investment than Air Busan. However, Worldex Industry Trading is 1.03 times less risky than Air Busan. It trades about -0.04 of its potential returns per unit of risk. Air Busan Co is currently generating about -0.25 per unit of risk. If you would invest 1,692,000 in Worldex Industry Trading on September 27, 2024 and sell it today you would lose (39,000) from holding Worldex Industry Trading or give up 2.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Worldex Industry Trading vs. Air Busan Co
Performance |
| Timeline |
| Worldex Industry Trading |
| Air Busan |
Worldex Industry and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Worldex Industry and Air Busan
The main advantage of trading using opposite Worldex Industry and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldex Industry position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Worldex Industry vs. WONIK Materials CoLtd | Worldex Industry vs. SS TECH | Worldex Industry vs. TES Co | Worldex Industry vs. LEENO Industrial |
| Air Busan vs. Golden Bridge Investment | Air Busan vs. Sangsangin Investment Securities | Air Busan vs. Worldex Industry Trading | Air Busan vs. Woori Technology Investment |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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