Correlation Between Kolon Plastics and Air Busan
Can any of the company-specific risk be diversified away by investing in both Kolon Plastics 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 Kolon Plastics and Air Busan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kolon Plastics and Air Busan Co, you can compare the effects of market volatilities on Kolon Plastics 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 Kolon Plastics with a short position of Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kolon Plastics and Air Busan.
Diversification Opportunities for Kolon Plastics and Air Busan
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kolon and Air is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kolon Plastics and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan and Kolon Plastics 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 Kolon Plastics 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 Kolon Plastics i.e., Kolon Plastics and Air Busan go up and down completely randomly.
Pair Corralation between Kolon Plastics and Air Busan
Assuming the 90 days trading horizon Kolon Plastics is expected to generate 1.62 times more return on investment than Air Busan. However, Kolon Plastics is 1.62 times more volatile than Air Busan Co. It trades about -0.03 of its potential returns per unit of risk. Air Busan Co is currently generating about -0.07 per unit of risk. If you would invest 550,000 in Kolon Plastics on October 16, 2024 and sell it today you would lose (7,000) from holding Kolon Plastics or give up 1.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kolon Plastics vs. Air Busan Co
Performance |
| Timeline |
| Kolon Plastics |
| Air Busan |
Kolon Plastics and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kolon Plastics and Air Busan
The main advantage of trading using opposite Kolon Plastics and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kolon Plastics 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.| Kolon Plastics vs. AptaBio Therapeutics | Kolon Plastics vs. Daewoo SBI SPAC | Kolon Plastics vs. Dream Security co | Kolon Plastics vs. Microfriend |
| 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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