Correlation Between Grand Korea and DB Insurance
Can any of the company-specific risk be diversified away by investing in both Grand Korea and DB Insurance 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 Grand Korea and DB Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Korea Leisure and DB Insurance Co, you can compare the effects of market volatilities on Grand Korea and DB Insurance 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 Grand Korea with a short position of DB Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and DB Insurance.
Diversification Opportunities for Grand Korea and DB Insurance
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grand and 005830 is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and DB Insurance Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DB Insurance and Grand Korea 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 Grand Korea Leisure are associated (or correlated) with DB Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DB Insurance has no effect on the direction of Grand Korea i.e., Grand Korea and DB Insurance go up and down completely randomly.
Pair Corralation between Grand Korea and DB Insurance
Assuming the 90 days trading horizon Grand Korea Leisure is expected to under-perform the DB Insurance. But the stock apears to be less risky and, when comparing its historical volatility, Grand Korea Leisure is 1.1 times less risky than DB Insurance. The stock trades about -0.03 of its potential returns per unit of risk. The DB Insurance Co is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5,575,021 in DB Insurance Co on September 3, 2024 and sell it today you would earn a total of 5,344,979 from holding DB Insurance Co or generate 95.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Korea Leisure vs. DB Insurance Co
Performance |
| Timeline |
| Grand Korea Leisure |
| DB Insurance |
Grand Korea and DB Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and DB Insurance
The main advantage of trading using opposite Grand Korea and DB Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, DB Insurance 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 DB Insurance will offset losses from the drop in DB Insurance's long position.| Grand Korea vs. Busan Industrial Co | Grand Korea vs. UNISEM Co | Grand Korea vs. RPBio Inc | Grand Korea vs. Finebesteel |
| DB Insurance vs. Playgram Co | DB Insurance vs. National Plastic Co | DB Insurance vs. Grand Korea Leisure | DB Insurance vs. EV Advanced Material |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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