Correlation Between Air Busan and Dongwoo Farm
Can any of the company-specific risk be diversified away by investing in both Air Busan and Dongwoo Farm 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 Dongwoo Farm 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 Dongwoo Farm To, you can compare the effects of market volatilities on Air Busan and Dongwoo Farm 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 Dongwoo Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and Dongwoo Farm.
Diversification Opportunities for Air Busan and Dongwoo Farm
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Dongwoo is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and Dongwoo Farm To in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dongwoo Farm To 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 Dongwoo Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dongwoo Farm To has no effect on the direction of Air Busan i.e., Air Busan and Dongwoo Farm go up and down completely randomly.
Pair Corralation between Air Busan and Dongwoo Farm
Assuming the 90 days trading horizon Air Busan Co is expected to generate 1.33 times more return on investment than Dongwoo Farm. However, Air Busan is 1.33 times more volatile than Dongwoo Farm To. It trades about -0.03 of its potential returns per unit of risk. Dongwoo Farm To is currently generating about -0.09 per unit of risk. If you would invest 258,500 in Air Busan Co on October 14, 2024 and sell it today you would lose (34,000) from holding Air Busan Co or give up 13.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Busan Co vs. Dongwoo Farm To
Performance |
| Timeline |
| Air Busan |
| Dongwoo Farm To |
Air Busan and Dongwoo Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and Dongwoo Farm
The main advantage of trading using opposite Air Busan and Dongwoo Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, Dongwoo Farm 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 Dongwoo Farm will offset losses from the drop in Dongwoo Farm'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 |
| Dongwoo Farm vs. Nice Information Telecommunication | Dongwoo Farm vs. Hankook Steel Co | Dongwoo Farm vs. Daishin Information Communications | Dongwoo Farm vs. Han Kook Steel |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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