Correlation Between Grand Korea and Youngsin Metal
Can any of the company-specific risk be diversified away by investing in both Grand Korea and Youngsin Metal 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 Youngsin Metal 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 Youngsin Metal Industrial, you can compare the effects of market volatilities on Grand Korea and Youngsin Metal 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 Youngsin Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and Youngsin Metal.
Diversification Opportunities for Grand Korea and Youngsin Metal
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grand and Youngsin is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and Youngsin Metal Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Youngsin Metal Industrial 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 Youngsin Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Youngsin Metal Industrial has no effect on the direction of Grand Korea i.e., Grand Korea and Youngsin Metal go up and down completely randomly.
Pair Corralation between Grand Korea and Youngsin Metal
Assuming the 90 days trading horizon Grand Korea is expected to generate 2.02 times less return on investment than Youngsin Metal. But when comparing it to its historical volatility, Grand Korea Leisure is 2.93 times less risky than Youngsin Metal. It trades about 0.18 of its potential returns per unit of risk. Youngsin Metal Industrial is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 199,900 in Youngsin Metal Industrial on October 11, 2024 and sell it today you would earn a total of 18,600 from holding Youngsin Metal Industrial or generate 9.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Korea Leisure vs. Youngsin Metal Industrial
Performance |
| Timeline |
| Grand Korea Leisure |
| Youngsin Metal Industrial |
Grand Korea and Youngsin Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and Youngsin Metal
The main advantage of trading using opposite Grand Korea and Youngsin Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, Youngsin Metal 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 Youngsin Metal will offset losses from the drop in Youngsin Metal's long position.| Grand Korea vs. Cheryong Industrial CoLtd | Grand Korea vs. Namhae Chemical | Grand Korea vs. LEENO Industrial | Grand Korea vs. Hwasung Industrial Co |
| Youngsin Metal vs. Grand Korea Leisure | Youngsin Metal vs. LG Household Healthcare | Youngsin Metal vs. Display Tech Co | Youngsin Metal vs. INFINITT Healthcare 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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