Correlation Between LATAM Airlines and Kaixin Auto
Can any of the company-specific risk be diversified away by investing in both LATAM Airlines and Kaixin Auto 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 LATAM Airlines and Kaixin Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LATAM Airlines Group and Kaixin Auto Holdings, you can compare the effects of market volatilities on LATAM Airlines and Kaixin Auto 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 LATAM Airlines with a short position of Kaixin Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of LATAM Airlines and Kaixin Auto.
Diversification Opportunities for LATAM Airlines and Kaixin Auto
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between LATAM and Kaixin is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding LATAM Airlines Group and Kaixin Auto Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaixin Auto Holdings and LATAM 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 LATAM Airlines Group are associated (or correlated) with Kaixin Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaixin Auto Holdings has no effect on the direction of LATAM Airlines i.e., LATAM Airlines and Kaixin Auto go up and down completely randomly.
Pair Corralation between LATAM Airlines and Kaixin Auto
Considering the 90-day investment horizon LATAM Airlines Group is expected to generate 0.13 times more return on investment than Kaixin Auto. However, LATAM Airlines Group is 7.79 times less risky than Kaixin Auto. It trades about 0.03 of its potential returns per unit of risk. Kaixin Auto Holdings is currently generating about -0.05 per unit of risk. If you would invest 4,935 in LATAM Airlines Group on September 8, 2025 and sell it today you would earn a total of 148.00 from holding LATAM Airlines Group or generate 3.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LATAM Airlines Group vs. Kaixin Auto Holdings
Performance |
| Timeline |
| LATAM Airlines Group |
| Kaixin Auto Holdings |
LATAM Airlines and Kaixin Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LATAM Airlines and Kaixin Auto
The main advantage of trading using opposite LATAM Airlines and Kaixin Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LATAM Airlines position performs unexpectedly, Kaixin Auto 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 Kaixin Auto will offset losses from the drop in Kaixin Auto's long position.| LATAM Airlines vs. Ainsworth Game Technology | LATAM Airlines vs. Asure Software | LATAM Airlines vs. Infinite Technology Corp | LATAM Airlines vs. Datatec Limited |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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