Correlation Between Grand Korea and OCI Co
Can any of the company-specific risk be diversified away by investing in both Grand Korea and OCI Co 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 OCI Co 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 OCI Co, you can compare the effects of market volatilities on Grand Korea and OCI Co 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 OCI Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and OCI Co.
Diversification Opportunities for Grand Korea and OCI Co
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and OCI is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and OCI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OCI Co 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 OCI Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OCI Co has no effect on the direction of Grand Korea i.e., Grand Korea and OCI Co go up and down completely randomly.
Pair Corralation between Grand Korea and OCI Co
Assuming the 90 days trading horizon Grand Korea Leisure is expected to generate 0.82 times more return on investment than OCI Co. However, Grand Korea Leisure is 1.22 times less risky than OCI Co. It trades about 0.16 of its potential returns per unit of risk. OCI Co is currently generating about 0.08 per unit of risk. If you would invest 1,043,000 in Grand Korea Leisure on September 13, 2024 and sell it today you would earn a total of 77,000 from holding Grand Korea Leisure or generate 7.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grand Korea Leisure vs. OCI Co
Performance |
| Timeline |
| Grand Korea Leisure |
| OCI Co |
Grand Korea and OCI Co Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and OCI Co
The main advantage of trading using opposite Grand Korea and OCI Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, OCI Co 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 OCI Co will offset losses from the drop in OCI Co's long position.| Grand Korea vs. Lion Chemtech Co | Grand Korea vs. Eagle Veterinary Technology | Grand Korea vs. Inzi Display CoLtd | Grand Korea vs. Nice Information Telecommunication |
| OCI Co vs. Miwon Chemicals Co | OCI Co vs. Ssangyong Information Communication | OCI Co vs. BGF Retail Co | OCI Co vs. Samyung Trading 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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