Correlation Between Air Busan and Daewoo SBI
Can any of the company-specific risk be diversified away by investing in both Air Busan and Daewoo SBI 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 Daewoo SBI 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 Daewoo SBI SPAC, you can compare the effects of market volatilities on Air Busan and Daewoo SBI 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 Daewoo SBI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and Daewoo SBI.
Diversification Opportunities for Air Busan and Daewoo SBI
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Air and Daewoo is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and Daewoo SBI SPAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo SBI SPAC 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 Daewoo SBI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo SBI SPAC has no effect on the direction of Air Busan i.e., Air Busan and Daewoo SBI go up and down completely randomly.
Pair Corralation between Air Busan and Daewoo SBI
Assuming the 90 days trading horizon Air Busan Co is expected to generate 0.94 times more return on investment than Daewoo SBI. However, Air Busan Co is 1.07 times less risky than Daewoo SBI. It trades about 0.14 of its potential returns per unit of risk. Daewoo SBI SPAC is currently generating about -0.28 per unit of risk. If you would invest 233,000 in Air Busan Co on September 2, 2024 and sell it today you would earn a total of 12,000 from holding Air Busan Co or generate 5.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air Busan Co vs. Daewoo SBI SPAC
Performance |
| Timeline |
| Air Busan |
| Daewoo SBI SPAC |
Air Busan and Daewoo SBI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and Daewoo SBI
The main advantage of trading using opposite Air Busan and Daewoo SBI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, Daewoo SBI 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 Daewoo SBI will offset losses from the drop in Daewoo SBI's long position.| Air Busan vs. Shinil Electronics Co | Air Busan vs. Sungmoon Electronics Co | Air Busan vs. FOODWELL Co | Air Busan vs. Korea Electronic Certification |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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