Correlation Between Alton Sports and Jin Air
Can any of the company-specific risk be diversified away by investing in both Alton Sports 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 Alton Sports and Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Jin Air Co, you can compare the effects of market volatilities on Alton Sports 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 Alton Sports with a short position of Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Jin Air.
Diversification Opportunities for Alton Sports and Jin Air
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alton and Jin is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air and Alton Sports 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 Alton Sports CoLtd 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 Alton Sports i.e., Alton Sports and Jin Air go up and down completely randomly.
Pair Corralation between Alton Sports and Jin Air
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Jin Air. In addition to that, Alton Sports is 1.14 times more volatile than Jin Air Co. It trades about -0.08 of its total potential returns per unit of risk. Jin Air Co is currently generating about -0.02 per unit of volatility. If you would invest 1,570,000 in Jin Air Co on September 3, 2024 and sell it today you would lose (392,000) from holding Jin Air Co or give up 24.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Jin Air Co
Performance |
| Timeline |
| Alton Sports CoLtd |
| Jin Air |
Alton Sports and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Jin Air
The main advantage of trading using opposite Alton Sports and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports 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.| Alton Sports vs. Korea Information Communications | Alton Sports vs. Korean Reinsurance Co | Alton Sports vs. Lotte Non Life Insurance | Alton Sports vs. Sempio Foods Co |
| Jin Air vs. DataSolution | Jin Air vs. Alton Sports CoLtd | Jin Air vs. SCI Information Service | Jin Air vs. Shinsegae Food |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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