Correlation Between Grand Korea and Korea Information
Can any of the company-specific risk be diversified away by investing in both Grand Korea and Korea Information 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 Korea Information 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 Korea Information Communications, you can compare the effects of market volatilities on Grand Korea and Korea Information 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 Korea Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and Korea Information.
Diversification Opportunities for Grand Korea and Korea Information
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and Korea is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and Korea Information Communicatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Information 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 Korea Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Information has no effect on the direction of Grand Korea i.e., Grand Korea and Korea Information go up and down completely randomly.
Pair Corralation between Grand Korea and Korea Information
Assuming the 90 days trading horizon Grand Korea Leisure is expected to generate 0.91 times more return on investment than Korea Information. However, Grand Korea Leisure is 1.09 times less risky than Korea Information. It trades about -0.03 of its potential returns per unit of risk. Korea Information Communications is currently generating about -0.03 per unit of risk. If you would invest 1,734,869 in Grand Korea Leisure on August 25, 2024 and sell it today you would lose (647,869) from holding Grand Korea Leisure or give up 37.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Korea Leisure vs. Korea Information Communicatio
Performance |
| Timeline |
| Grand Korea Leisure |
| Korea Information |
Grand Korea and Korea Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and Korea Information
The main advantage of trading using opposite Grand Korea and Korea Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, Korea Information 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 Korea Information will offset losses from the drop in Korea Information's long position.| Grand Korea vs. Korea Information Communications | Grand Korea vs. Nable Communications | Grand Korea vs. Ssangyong Information Communication | Grand Korea vs. EBEST Investment Securities |
| Korea Information vs. Korea Real Estate | Korea Information vs. Korea Ratings Co | Korea Information vs. IQuest Co | Korea Information vs. Wonbang 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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