Correlation Between Grand Korea and Kwang Jin
Can any of the company-specific risk be diversified away by investing in both Grand Korea and Kwang Jin 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 Kwang Jin 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 Kwang Jin Ind, you can compare the effects of market volatilities on Grand Korea and Kwang Jin 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 Kwang Jin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and Kwang Jin.
Diversification Opportunities for Grand Korea and Kwang Jin
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Grand and Kwang is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and Kwang Jin Ind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kwang Jin Ind 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 Kwang Jin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kwang Jin Ind has no effect on the direction of Grand Korea i.e., Grand Korea and Kwang Jin go up and down completely randomly.
Pair Corralation between Grand Korea and Kwang Jin
Assuming the 90 days trading horizon Grand Korea Leisure is expected to under-perform the Kwang Jin. In addition to that, Grand Korea is 1.08 times more volatile than Kwang Jin Ind. It trades about -0.14 of its total potential returns per unit of risk. Kwang Jin Ind is currently generating about 0.16 per unit of volatility. If you would invest 186,200 in Kwang Jin Ind on December 10, 2024 and sell it today you would earn a total of 5,800 from holding Kwang Jin Ind or generate 3.11% 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. Kwang Jin Ind
Performance |
| Timeline |
| Grand Korea Leisure |
| Kwang Jin Ind |
Grand Korea and Kwang Jin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and Kwang Jin
The main advantage of trading using opposite Grand Korea and Kwang Jin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, Kwang Jin 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 Kwang Jin will offset losses from the drop in Kwang Jin's long position.| Grand Korea vs. Dongnam Chemical Co | Grand Korea vs. MetaLabs Co | Grand Korea vs. Polaris Office Corp | Grand Korea vs. Korea Industrial Co |
| Kwang Jin vs. SV Investment | Kwang Jin vs. LB Investment | Kwang Jin vs. Lotte Chilsung Beverage | Kwang Jin vs. Golden Bridge Investment |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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