Correlation Between Air Busan and SK IE
Can any of the company-specific risk be diversified away by investing in both Air Busan and SK IE 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 SK IE 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 SK IE Technology, you can compare the effects of market volatilities on Air Busan and SK IE 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 SK IE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and SK IE.
Diversification Opportunities for Air Busan and SK IE
Modest diversification
The 3 months correlation between Air and 361610 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and SK IE Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK IE Technology 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 SK IE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK IE Technology has no effect on the direction of Air Busan i.e., Air Busan and SK IE go up and down completely randomly.
Pair Corralation between Air Busan and SK IE
Assuming the 90 days trading horizon Air Busan Co is expected to generate 0.76 times more return on investment than SK IE. However, Air Busan Co is 1.32 times less risky than SK IE. It trades about 0.02 of its potential returns per unit of risk. SK IE Technology is currently generating about -0.04 per unit of risk. If you would invest 231,000 in Air Busan Co on September 3, 2024 and sell it today you would earn a total of 14,000 from holding Air Busan Co or generate 6.06% 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. SK IE Technology
Performance |
| Timeline |
| Air Busan |
| SK IE Technology |
Air Busan and SK IE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air Busan and SK IE
The main advantage of trading using opposite Air Busan and SK IE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, SK IE 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 SK IE will offset losses from the drop in SK IE's long position.| Air Busan vs. Shinsung Delta Tech | Air Busan vs. Aprogen Healthcare Games | Air Busan vs. Yura Tech Co | Air Busan vs. Chorokbaem Healthcare Co |
| SK IE vs. Home Center Holdings | SK IE vs. Hyundai Home Shopping | SK IE vs. Lotte Non Life Insurance | SK IE vs. Air Busan Co |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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