Correlation Between Grand Korea and Newtree CoLtd
Can any of the company-specific risk be diversified away by investing in both Grand Korea and Newtree CoLtd 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 Newtree CoLtd 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 Newtree CoLtd, you can compare the effects of market volatilities on Grand Korea and Newtree CoLtd 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 Newtree CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and Newtree CoLtd.
Diversification Opportunities for Grand Korea and Newtree CoLtd
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grand and Newtree is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and Newtree CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtree CoLtd 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 Newtree CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtree CoLtd has no effect on the direction of Grand Korea i.e., Grand Korea and Newtree CoLtd go up and down completely randomly.
Pair Corralation between Grand Korea and Newtree CoLtd
Assuming the 90 days trading horizon Grand Korea Leisure is expected to generate 0.42 times more return on investment than Newtree CoLtd. However, Grand Korea Leisure is 2.4 times less risky than Newtree CoLtd. It trades about 0.21 of its potential returns per unit of risk. Newtree CoLtd is currently generating about -0.24 per unit of risk. If you would invest 1,035,000 in Grand Korea Leisure on September 14, 2024 and sell it today you would earn a total of 106,000 from holding Grand Korea Leisure or generate 10.24% 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. Newtree CoLtd
Performance |
| Timeline |
| Grand Korea Leisure |
| Newtree CoLtd |
Grand Korea and Newtree CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Korea and Newtree CoLtd
The main advantage of trading using opposite Grand Korea and Newtree CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, Newtree CoLtd 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 Newtree CoLtd will offset losses from the drop in Newtree CoLtd's long position.| Grand Korea vs. i Components Co | Grand Korea vs. Naver | Grand Korea vs. Busan Industrial Co | Grand Korea vs. Busan Ind |
| Newtree CoLtd vs. Pan Entertainment Co | Newtree CoLtd vs. Insung Information Co | Newtree CoLtd vs. Grand Korea Leisure | Newtree CoLtd vs. Display 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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