Correlation Between Asiana Airlines and BIT Computer
Can any of the company-specific risk be diversified away by investing in both Asiana Airlines and BIT Computer 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 Asiana Airlines and BIT Computer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asiana Airlines and BIT Computer Co, you can compare the effects of market volatilities on Asiana Airlines and BIT Computer 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 Asiana Airlines with a short position of BIT Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asiana Airlines and BIT Computer.
Diversification Opportunities for Asiana Airlines and BIT Computer
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Asiana and BIT is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Asiana Airlines and BIT Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIT Computer and Asiana Airlines 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 Asiana Airlines are associated (or correlated) with BIT Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIT Computer has no effect on the direction of Asiana Airlines i.e., Asiana Airlines and BIT Computer go up and down completely randomly.
Pair Corralation between Asiana Airlines and BIT Computer
Assuming the 90 days trading horizon Asiana Airlines is expected to generate 1.74 times less return on investment than BIT Computer. But when comparing it to its historical volatility, Asiana Airlines is 1.78 times less risky than BIT Computer. It trades about 0.31 of its potential returns per unit of risk. BIT Computer Co is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 435,399 in BIT Computer Co on October 8, 2024 and sell it today you would earn a total of 63,601 from holding BIT Computer Co or generate 14.61% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Asiana Airlines vs. BIT Computer Co
Performance |
Timeline |
Asiana Airlines |
BIT Computer |
Asiana Airlines and BIT Computer Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Asiana Airlines and BIT Computer
The main advantage of trading using opposite Asiana Airlines and BIT Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asiana Airlines position performs unexpectedly, BIT Computer 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 BIT Computer will offset losses from the drop in BIT Computer's long position.Asiana Airlines vs. AptaBio Therapeutics | Asiana Airlines vs. Daewoo SBI SPAC | Asiana Airlines vs. Dream Security co | Asiana Airlines vs. Microfriend |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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