Correlation Between Korea Air and Seers Technology

Can any of the company-specific risk be diversified away by investing in both Korea Air and Seers Technology 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 Korea Air and Seers Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Korea Air Svc and Seers Technology, you can compare the effects of market volatilities on Korea Air and Seers Technology 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 Korea Air with a short position of Seers Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Air and Seers Technology.

Diversification Opportunities for Korea Air and Seers Technology

0.3

Correlation Coefficient

Korea Air  Seers Technology

Weak diversification

The 3 months correlation between Korea and Seers is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Korea Air Svc and Seers Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seers Technology and Korea Air 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 Korea Air Svc are associated (or correlated) with Seers Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seers Technology has no effect on the direction of Korea Air i.e., Korea Air and Seers Technology go up and down completely randomly.

Pair Corralation between Korea Air and Seers Technology

Assuming the 90 days trading horizon Korea Air Svc is expected to under-perform the Seers Technology. But the stock apears to be less risky and, when comparing its historical volatility, Korea Air Svc is 1.57 times less risky than Seers Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Seers Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  1,254,000  in Seers Technology on October 26, 2024 and sell it today you would lose (37,000) from holding Seers Technology or give up 2.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Korea Air Svc  vs.  Seers Technology

Korea Air Svc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Korea Air Svc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Korea Air is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Seers Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Seers Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Seers Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Korea Air and Seers Technology

The main advantage of trading using opposite Korea Air and Seers Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Air position performs unexpectedly, Seers Technology 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 Seers Technology will offset losses from the drop in Seers Technology's long position.

The idea behind Korea Air Svc and Seers Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.