Correlation Between PlayD and Asiana Airlines
Can any of the company-specific risk be diversified away by investing in both PlayD 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 PlayD and Asiana Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PlayD Co and Asiana Airlines, you can compare the effects of market volatilities on PlayD 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 PlayD with a short position of Asiana Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of PlayD and Asiana Airlines.
Diversification Opportunities for PlayD and Asiana Airlines
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between PlayD and Asiana is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding PlayD Co and Asiana Airlines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asiana Airlines and PlayD 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 PlayD Co 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 PlayD i.e., PlayD and Asiana Airlines go up and down completely randomly.
Pair Corralation between PlayD and Asiana Airlines
Assuming the 90 days trading horizon PlayD is expected to generate 1.7 times less return on investment than Asiana Airlines. In addition to that, PlayD is 2.77 times more volatile than Asiana Airlines. It trades about 0.05 of its total potential returns per unit of risk. Asiana Airlines is currently generating about 0.24 per unit of volatility. If you would invest 1,012,000 in Asiana Airlines on October 17, 2024 and sell it today you would earn a total of 53,000 from holding Asiana Airlines or generate 5.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
PlayD Co vs. Asiana Airlines
Performance |
Timeline |
PlayD |
Asiana Airlines |
PlayD and Asiana Airlines Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with PlayD and Asiana Airlines
The main advantage of trading using opposite PlayD and Asiana Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PlayD 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.PlayD vs. Cube Entertainment | PlayD vs. ASTORY CoLtd | PlayD vs. Neungyule Education | PlayD vs. Konan Technology |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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