Correlation Between Booster and Grand Korea
Can any of the company-specific risk be diversified away by investing in both Booster and Grand Korea 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 Booster and Grand Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Booster Co and Grand Korea Leisure, you can compare the effects of market volatilities on Booster and Grand Korea 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 Booster with a short position of Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Booster and Grand Korea.
Diversification Opportunities for Booster and Grand Korea
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Booster and Grand is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Booster Co and Grand Korea Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Korea Leisure and Booster 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 Booster Co are associated (or correlated) with Grand Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Korea Leisure has no effect on the direction of Booster i.e., Booster and Grand Korea go up and down completely randomly.
Pair Corralation between Booster and Grand Korea
Assuming the 90 days trading horizon Booster Co is expected to generate 0.64 times more return on investment than Grand Korea. However, Booster Co is 1.56 times less risky than Grand Korea. It trades about 0.19 of its potential returns per unit of risk. Grand Korea Leisure is currently generating about 0.05 per unit of risk. If you would invest 338,000 in Booster Co on September 4, 2024 and sell it today you would earn a total of 65,000 from holding Booster Co or generate 19.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Booster Co vs. Grand Korea Leisure
Performance |
| Timeline |
| Booster |
| Grand Korea Leisure |
Booster and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Booster and Grand Korea
The main advantage of trading using opposite Booster and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Booster position performs unexpectedly, Grand Korea 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 Grand Korea will offset losses from the drop in Grand Korea's long position.| Booster vs. Samlip General Foods | Booster vs. Samyang Foods Co | Booster vs. Seoul Food Industrial | Booster vs. Shinsegae Food |
| Grand Korea vs. Busan Industrial Co | Grand Korea vs. UNISEM Co | Grand Korea vs. RPBio Inc | Grand Korea vs. Finebesteel |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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