Correlation Between PLAYWITH and Grand Korea
Can any of the company-specific risk be diversified away by investing in both PLAYWITH 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 PLAYWITH and Grand Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLAYWITH and Grand Korea Leisure, you can compare the effects of market volatilities on PLAYWITH 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 PLAYWITH with a short position of Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLAYWITH and Grand Korea.
Diversification Opportunities for PLAYWITH and Grand Korea
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PLAYWITH and Grand is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding PLAYWITH 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 PLAYWITH 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 PLAYWITH 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 PLAYWITH i.e., PLAYWITH and Grand Korea go up and down completely randomly.
Pair Corralation between PLAYWITH and Grand Korea
Assuming the 90 days trading horizon PLAYWITH is expected to under-perform the Grand Korea. In addition to that, PLAYWITH is 1.45 times more volatile than Grand Korea Leisure. It trades about -0.16 of its total potential returns per unit of risk. Grand Korea Leisure is currently generating about 0.11 per unit of volatility. If you would invest 1,119,000 in Grand Korea Leisure on August 31, 2024 and sell it today you would earn a total of 51,000 from holding Grand Korea Leisure or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLAYWITH vs. Grand Korea Leisure
Performance |
| Timeline |
| PLAYWITH |
| Grand Korea Leisure |
PLAYWITH and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLAYWITH and Grand Korea
The main advantage of trading using opposite PLAYWITH and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLAYWITH 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.The idea behind PLAYWITH and Grand Korea Leisure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Grand Korea vs. Busan Industrial Co | Grand Korea vs. Busan Ind | Grand Korea vs. Mirae Asset Daewoo | 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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