Correlation Between Air Busan and SEOJEON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Air Busan and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC 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 SEOJEON ELECTRIC MACHINERY, you can compare the effects of market volatilities on Air Busan and SEOJEON ELECTRIC 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 SEOJEON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and SEOJEON ELECTRIC.
Diversification Opportunities for Air Busan and SEOJEON ELECTRIC
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Air and SEOJEON is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and SEOJEON ELECTRIC MACHINERY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEOJEON ELECTRIC MAC 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 SEOJEON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEOJEON ELECTRIC MAC has no effect on the direction of Air Busan i.e., Air Busan and SEOJEON ELECTRIC go up and down completely randomly.
Pair Corralation between Air Busan and SEOJEON ELECTRIC
Assuming the 90 days trading horizon Air Busan Co is expected to generate 0.43 times more return on investment than SEOJEON ELECTRIC. However, Air Busan Co is 2.35 times less risky than SEOJEON ELECTRIC. It trades about -0.01 of its potential returns per unit of risk. SEOJEON ELECTRIC MACHINERY is currently generating about -0.19 per unit of risk. If you would invest 234,000 in Air Busan Co on August 27, 2024 and sell it today you would lose (1,000.00) from holding Air Busan Co or give up 0.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Busan Co vs. SEOJEON ELECTRIC MACHINERY
Performance |
| Timeline |
| Air Busan |
| SEOJEON ELECTRIC MAC |
Air Busan and SEOJEON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and SEOJEON ELECTRIC
The main advantage of trading using opposite Air Busan and SEOJEON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, SEOJEON ELECTRIC 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 SEOJEON ELECTRIC will offset losses from the drop in SEOJEON ELECTRIC'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 |
| SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Samsung Electronics Co | SEOJEON ELECTRIC vs. Hyundai Motor Co | SEOJEON ELECTRIC vs. Hyundai Motor |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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