Correlation Between Alton Sports and Air Busan
Can any of the company-specific risk be diversified away by investing in both Alton Sports 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 Alton Sports and Air Busan 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 Air Busan Co, you can compare the effects of market volatilities on Alton Sports 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 Alton Sports with a short position of Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Air Busan.
Diversification Opportunities for Alton Sports and Air Busan
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alton and Air is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 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 Alton Sports i.e., Alton Sports and Air Busan go up and down completely randomly.
Pair Corralation between Alton Sports and Air Busan
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to under-perform the Air Busan. In addition to that, Alton Sports is 1.02 times more volatile than Air Busan Co. It trades about -0.1 of its total potential returns per unit of risk. Air Busan Co is currently generating about -0.03 per unit of volatility. If you would invest 298,000 in Air Busan Co on October 16, 2024 and sell it today you would lose (73,000) from holding Air Busan Co or give up 24.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Air Busan Co
Performance |
| Timeline |
| Alton Sports CoLtd |
| Air Busan |
Alton Sports and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Air Busan
The main advantage of trading using opposite Alton Sports and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports 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.| Alton Sports vs. Shinil Industrial Co | Alton Sports vs. Daiyang Metal Co | Alton Sports vs. Daejung Chemicals Metals | Alton Sports vs. PJ Metal Co |
| Air Busan vs. Sejong Telecom | Air Busan vs. Alton Sports CoLtd | Air Busan vs. Automobile Pc | Air Busan 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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