Correlation Between Air Busan and Hanjin Transportation
Can any of the company-specific risk be diversified away by investing in both Air Busan and Hanjin Transportation 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 Air Busan and Hanjin Transportation into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Busan Co and Hanjin Transportation Co, you can compare the effects of market volatilities on Air Busan and Hanjin Transportation 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 Air Busan with a short position of Hanjin Transportation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and Hanjin Transportation.
Diversification Opportunities for Air Busan and Hanjin Transportation
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Hanjin is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and Hanjin Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanjin Transportation and Air Busan 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 Air Busan Co are associated (or correlated) with Hanjin Transportation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanjin Transportation has no effect on the direction of Air Busan i.e., Air Busan and Hanjin Transportation go up and down completely randomly.
Pair Corralation between Air Busan and Hanjin Transportation
Assuming the 90 days trading horizon Air Busan Co is expected to under-perform the Hanjin Transportation. In addition to that, Air Busan is 1.61 times more volatile than Hanjin Transportation Co. It trades about -0.16 of its total potential returns per unit of risk. Hanjin Transportation Co is currently generating about 0.49 per unit of volatility. If you would invest 1,833,610 in Hanjin Transportation Co on October 14, 2024 and sell it today you would earn a total of 124,390 from holding Hanjin Transportation Co or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Busan Co vs. Hanjin Transportation Co
Performance |
| Timeline |
| Air Busan |
| Hanjin Transportation |
Air Busan and Hanjin Transportation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and Hanjin Transportation
The main advantage of trading using opposite Air Busan and Hanjin Transportation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, Hanjin Transportation 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 Hanjin Transportation will offset losses from the drop in Hanjin Transportation's long position.| Air Busan vs. Digital Power Communications | Air Busan vs. Nable Communications | Air Busan vs. Samyoung Electronics Co | Air Busan vs. Samsung Electronics Co |
| Hanjin Transportation vs. RFTech Co | Hanjin Transportation vs. BNK Financial Group | Hanjin Transportation vs. Hana Financial | Hanjin Transportation vs. Samsung Life Insurance |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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