Correlation Between Alton Sports and Grand Korea
Can any of the company-specific risk be diversified away by investing in both Alton Sports and Grand Korea 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 Alton Sports and Grand Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alton Sports CoLtd and Grand Korea Leisure, you can compare the effects of market volatilities on Alton Sports and Grand Korea 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 Alton Sports with a short position of Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alton Sports and Grand Korea.
Diversification Opportunities for Alton Sports and Grand Korea
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Alton and Grand is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Alton Sports CoLtd and Grand Korea Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Korea Leisure and Alton Sports 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 Alton Sports CoLtd are associated (or correlated) with Grand Korea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Korea Leisure has no effect on the direction of Alton Sports i.e., Alton Sports and Grand Korea go up and down completely randomly.
Pair Corralation between Alton Sports and Grand Korea
Assuming the 90 days trading horizon Alton Sports CoLtd is expected to generate 1.26 times more return on investment than Grand Korea. However, Alton Sports is 1.26 times more volatile than Grand Korea Leisure. It trades about 0.33 of its potential returns per unit of risk. Grand Korea Leisure is currently generating about 0.1 per unit of risk. If you would invest 145,300 in Alton Sports CoLtd on November 5, 2024 and sell it today you would earn a total of 8,700 from holding Alton Sports CoLtd or generate 5.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alton Sports CoLtd vs. Grand Korea Leisure
Performance |
| Timeline |
| Alton Sports CoLtd |
| Grand Korea Leisure |
Alton Sports and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alton Sports and Grand Korea
The main advantage of trading using opposite Alton Sports and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alton Sports position performs unexpectedly, Grand Korea 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 Grand Korea will offset losses from the drop in Grand Korea's long position.| Alton Sports vs. KTB Investment Securities | Alton Sports vs. Sam Yang Foods | Alton Sports vs. Daol Investment Securities | Alton Sports vs. Woori Technology Investment |
| Grand Korea vs. Dongil Metal Co | Grand Korea vs. Samsung Life Insurance | Grand Korea vs. Hana Financial | Grand Korea vs. PJ Metal 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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