Correlation Between Air Busan and Taegu Broadcasting
Can any of the company-specific risk be diversified away by investing in both Air Busan and Taegu Broadcasting 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 Taegu Broadcasting 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 Taegu Broadcasting, you can compare the effects of market volatilities on Air Busan and Taegu Broadcasting 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 Taegu Broadcasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and Taegu Broadcasting.
Diversification Opportunities for Air Busan and Taegu Broadcasting
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and Taegu is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and Taegu Broadcasting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taegu Broadcasting 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 Taegu Broadcasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taegu Broadcasting has no effect on the direction of Air Busan i.e., Air Busan and Taegu Broadcasting go up and down completely randomly.
Pair Corralation between Air Busan and Taegu Broadcasting
Assuming the 90 days trading horizon Air Busan Co is expected to generate 1.59 times more return on investment than Taegu Broadcasting. However, Air Busan is 1.59 times more volatile than Taegu Broadcasting. It trades about 0.01 of its potential returns per unit of risk. Taegu Broadcasting is currently generating about -0.05 per unit of risk. If you would invest 228,000 in Air Busan Co on August 27, 2024 and sell it today you would earn a total of 5,000 from holding Air Busan Co or generate 2.19% 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. Taegu Broadcasting
Performance |
| Timeline |
| Air Busan |
| Taegu Broadcasting |
Air Busan and Taegu Broadcasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and Taegu Broadcasting
The main advantage of trading using opposite Air Busan and Taegu Broadcasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, Taegu Broadcasting 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 Taegu Broadcasting will offset losses from the drop in Taegu Broadcasting's long position.| Air Busan vs. Busan Industrial Co | Air Busan vs. Busan Ind | Air Busan vs. Mirae Asset Daewoo | Air Busan vs. UNISEM Co |
| Taegu Broadcasting vs. AfreecaTV Co | Taegu Broadcasting vs. SS TECH | Taegu Broadcasting vs. Busan Industrial Co | Taegu Broadcasting vs. Busan Ind |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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