Correlation Between Grand Korea and Kukdong Oil
Can any of the company-specific risk be diversified away by investing in both Grand Korea and Kukdong Oil 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 Kukdong Oil 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 Kukdong Oil Chemicals, you can compare the effects of market volatilities on Grand Korea and Kukdong Oil 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 Kukdong Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and Kukdong Oil.
Diversification Opportunities for Grand Korea and Kukdong Oil
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and Kukdong is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and Kukdong Oil Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kukdong Oil Chemicals 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 Kukdong Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kukdong Oil Chemicals has no effect on the direction of Grand Korea i.e., Grand Korea and Kukdong Oil go up and down completely randomly.
Pair Corralation between Grand Korea and Kukdong Oil
Assuming the 90 days trading horizon Grand Korea Leisure is expected to under-perform the Kukdong Oil. But the stock apears to be less risky and, when comparing its historical volatility, Grand Korea Leisure is 1.34 times less risky than Kukdong Oil. The stock trades about -0.03 of its potential returns per unit of risk. The Kukdong Oil Chemicals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 355,803 in Kukdong Oil Chemicals on August 29, 2024 and sell it today you would earn a total of 6,697 from holding Kukdong Oil Chemicals or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Korea Leisure vs. Kukdong Oil Chemicals
Performance |
| Timeline |
| Grand Korea Leisure |
| Kukdong Oil Chemicals |
Grand Korea and Kukdong Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and Kukdong Oil
The main advantage of trading using opposite Grand Korea and Kukdong Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, Kukdong Oil 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 Kukdong Oil will offset losses from the drop in Kukdong Oil's long position.| Grand Korea vs. TK Chemical | Grand Korea vs. Atinum Investment Co | Grand Korea vs. SBI Investment KOREA | Grand Korea vs. Posco Chemical Co |
| Kukdong Oil vs. AptaBio Therapeutics | Kukdong Oil vs. Daewoo SBI SPAC | Kukdong Oil vs. Dream Security co | Kukdong Oil vs. Microfriend |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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