Correlation Between ENF Technology and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both ENF Technology and Asiana Airlines 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 ENF Technology and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENF Technology Co and Asiana Airlines, you can compare the effects of market volatilities on ENF Technology and Asiana Airlines 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 ENF Technology with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENF Technology and Asiana Airlines.
Diversification Opportunities for ENF Technology and Asiana Airlines
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ENF and Asiana is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ENF Technology Co and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and ENF 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 ENF Technology Co are associated (or correlated) with Asiana Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asiana Airlines has no effect on the direction of ENF Technology i.e., ENF Technology and Asiana Airlines go up and down completely randomly.
Pair Corralation between ENF Technology and Asiana Airlines
Assuming the 90 days trading horizon ENF Technology Co is expected to under-perform the Asiana Airlines. In addition to that, ENF Technology is 1.71 times more volatile than Asiana Airlines. It trades about -0.01 of its total potential returns per unit of risk. Asiana Airlines is currently generating about 0.0 per unit of volatility. If you would invest 1,100,000 in Asiana Airlines on October 16, 2024 and sell it today you would lose (62,000) from holding Asiana Airlines or give up 5.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENF Technology Co vs. Asiana Airlines
Performance |
| Timeline |
| ENF Technology |
| Asiana Airlines |
ENF Technology and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENF Technology and Asiana Airlines
The main advantage of trading using opposite ENF Technology and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENF Technology position performs unexpectedly, Asiana Airlines 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 Asiana Airlines will offset losses from the drop in Asiana Airlines' long position.| ENF Technology vs. Dongjin Semichem Co | ENF Technology vs. SS TECH | ENF Technology vs. Tokai Carbon Korea | ENF Technology vs. Soulbrain Holdings Co |
| Asiana Airlines vs. ENF Technology Co | Asiana Airlines vs. Seoyon Topmetal Co | Asiana Airlines vs. DRB Industrial Co | Asiana Airlines vs. Drb Industrial |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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