Correlation Between Hugel and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Hugel 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 Hugel and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hugel Inc and Asiana Airlines, you can compare the effects of market volatilities on Hugel 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 Hugel with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hugel and Asiana Airlines.
Diversification Opportunities for Hugel and Asiana Airlines
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Hugel and Asiana is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Hugel Inc and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and Hugel 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 Hugel Inc 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 Hugel i.e., Hugel and Asiana Airlines go up and down completely randomly.
Pair Corralation between Hugel and Asiana Airlines
Assuming the 90 days trading horizon Hugel Inc is expected to generate 1.73 times more return on investment than Asiana Airlines. However, Hugel is 1.73 times more volatile than Asiana Airlines. It trades about 0.07 of its potential returns per unit of risk. Asiana Airlines is currently generating about -0.02 per unit of risk. If you would invest 12,750,000 in Hugel Inc on November 27, 2024 and sell it today you would earn a total of 18,050,000 from holding Hugel Inc or generate 141.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hugel Inc vs. Asiana Airlines
Performance |
| Timeline |
| Hugel Inc |
| Asiana Airlines |
Hugel and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hugel and Asiana Airlines
The main advantage of trading using opposite Hugel and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hugel 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.| Hugel vs. Sangsin Energy Display | Hugel vs. Hotel Shilla Co | Hugel vs. Nable Communications | Hugel vs. Hyunwoo Industrial Co |
| Asiana Airlines vs. Aju IB Investment | Asiana Airlines vs. KTB Investment Securities | Asiana Airlines vs. Sejong Industrial | Asiana Airlines vs. EBEST Investment Securities |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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