Correlation Between Kukil Metal and Grand Korea
Can any of the company-specific risk be diversified away by investing in both Kukil Metal 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 Kukil Metal and Grand Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kukil Metal Co and Grand Korea Leisure, you can compare the effects of market volatilities on Kukil Metal 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 Kukil Metal with a short position of Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kukil Metal and Grand Korea.
Diversification Opportunities for Kukil Metal and Grand Korea
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Kukil and Grand is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal 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 Kukil Metal 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 Kukil Metal 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 Kukil Metal i.e., Kukil Metal and Grand Korea go up and down completely randomly.
Pair Corralation between Kukil Metal and Grand Korea
Assuming the 90 days trading horizon Kukil Metal Co is expected to under-perform the Grand Korea. But the stock apears to be less risky and, when comparing its historical volatility, Kukil Metal Co is 1.22 times less risky than Grand Korea. The stock trades about -0.31 of its potential returns per unit of risk. The Grand Korea Leisure is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,146,000 in Grand Korea Leisure on September 1, 2024 and sell it today you would earn a total of 26,000 from holding Grand Korea Leisure or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kukil Metal Co vs. Grand Korea Leisure
Performance |
| Timeline |
| Kukil Metal |
| Grand Korea Leisure |
Kukil Metal and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kukil Metal and Grand Korea
The main advantage of trading using opposite Kukil Metal and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kukil Metal 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.| Kukil Metal vs. Keum Kang Steel | Kukil Metal vs. Tplex Co | Kukil Metal vs. Gyeongnam Steel Co | Kukil Metal vs. Jeil Steel Mfg |
| Grand Korea vs. Cots Technology Co | Grand Korea vs. RFTech Co | Grand Korea vs. Shinhan Inverse Silver | Grand Korea vs. Vitzro Tech 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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