Correlation Between Air Busan and Humax
Can any of the company-specific risk be diversified away by investing in both Air Busan and Humax 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 Humax 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 Humax Co, you can compare the effects of market volatilities on Air Busan and Humax 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 Humax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Busan and Humax.
Diversification Opportunities for Air Busan and Humax
Weak diversification
The 3 months correlation between Air and Humax is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Air Busan Co and Humax Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Humax 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 Humax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Humax has no effect on the direction of Air Busan i.e., Air Busan and Humax go up and down completely randomly.
Pair Corralation between Air Busan and Humax
Assuming the 90 days trading horizon Air Busan Co is expected to under-perform the Humax. But the stock apears to be less risky and, when comparing its historical volatility, Air Busan Co is 1.67 times less risky than Humax. The stock trades about -0.02 of its potential returns per unit of risk. The Humax Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 123,900 in Humax Co on December 3, 2024 and sell it today you would earn a total of 100.00 from holding Humax Co or generate 0.08% 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. Humax Co
Performance |
Timeline |
Air Busan |
Humax |
Air Busan and Humax Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Air Busan and Humax
The main advantage of trading using opposite Air Busan and Humax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Busan position performs unexpectedly, Humax 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 Humax will offset losses from the drop in Humax's long position.Air Busan vs. Sempio Foods Co | Air Busan vs. Lotte Chilsung Beverage | Air Busan vs. Daejung Chemicals Metals | Air Busan vs. Hankukpackage 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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