Correlation Between Drb Industrial and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both Drb Industrial 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 Drb Industrial and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Drb Industrial and Asiana Airlines, you can compare the effects of market volatilities on Drb Industrial 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 Drb Industrial with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Drb Industrial and Asiana Airlines.
Diversification Opportunities for Drb Industrial and Asiana Airlines
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Drb and Asiana is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Drb Industrial and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and Drb Industrial 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 Drb Industrial 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 Drb Industrial i.e., Drb Industrial and Asiana Airlines go up and down completely randomly.
Pair Corralation between Drb Industrial and Asiana Airlines
Assuming the 90 days trading horizon Drb Industrial is expected to generate 1.24 times more return on investment than Asiana Airlines. However, Drb Industrial is 1.24 times more volatile than Asiana Airlines. It trades about 0.15 of its potential returns per unit of risk. Asiana Airlines is currently generating about 0.13 per unit of risk. If you would invest 701,000 in Drb Industrial on October 16, 2024 and sell it today you would earn a total of 26,000 from holding Drb Industrial or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Drb Industrial vs. Asiana Airlines
Performance |
| Timeline |
| Drb Industrial |
| Asiana Airlines |
Drb Industrial and Asiana Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Drb Industrial and Asiana Airlines
The main advantage of trading using opposite Drb Industrial and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Drb Industrial 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.| Drb Industrial vs. Samsung Life Insurance | Drb Industrial vs. InfoBank | Drb Industrial vs. Shinhan Financial Group | Drb Industrial vs. Daiyang Metal 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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