Correlation Between GS Retail and Korea Alcohol
Can any of the company-specific risk be diversified away by investing in both GS Retail and Korea Alcohol 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 GS Retail and Korea Alcohol into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GS Retail Co and Korea Alcohol Industrial, you can compare the effects of market volatilities on GS Retail and Korea Alcohol 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 GS Retail with a short position of Korea Alcohol. Check out your portfolio center. Please also check ongoing floating volatility patterns of GS Retail and Korea Alcohol.
Diversification Opportunities for GS Retail and Korea Alcohol
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between 007070 and Korea is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding GS Retail Co and Korea Alcohol Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Alcohol Industrial and GS Retail 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 GS Retail Co are associated (or correlated) with Korea Alcohol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Alcohol Industrial has no effect on the direction of GS Retail i.e., GS Retail and Korea Alcohol go up and down completely randomly.
Pair Corralation between GS Retail and Korea Alcohol
Assuming the 90 days trading horizon GS Retail Co is expected to generate 1.48 times more return on investment than Korea Alcohol. However, GS Retail is 1.48 times more volatile than Korea Alcohol Industrial. It trades about 0.25 of its potential returns per unit of risk. Korea Alcohol Industrial is currently generating about -0.14 per unit of risk. If you would invest 2,080,000 in GS Retail Co on August 30, 2024 and sell it today you would earn a total of 235,000 from holding GS Retail Co or generate 11.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GS Retail Co vs. Korea Alcohol Industrial
Performance |
| Timeline |
| GS Retail |
| Korea Alcohol Industrial |
GS Retail and Korea Alcohol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GS Retail and Korea Alcohol
The main advantage of trading using opposite GS Retail and Korea Alcohol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GS Retail position performs unexpectedly, Korea Alcohol 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 Korea Alcohol will offset losses from the drop in Korea Alcohol's long position.| GS Retail vs. AptaBio Therapeutics | GS Retail vs. Daewoo SBI SPAC | GS Retail vs. Dream Security co | GS Retail vs. Microfriend |
| Korea Alcohol vs. Hanil Iron Steel | Korea Alcohol vs. Lotte Non Life Insurance | Korea Alcohol vs. TOPMATERIAL LTD | Korea Alcohol vs. Dongbu Steel 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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