Correlation Between DSC Investment and Grand Korea
Can any of the company-specific risk be diversified away by investing in both DSC Investment 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 DSC Investment and Grand Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DSC Investment and Grand Korea Leisure, you can compare the effects of market volatilities on DSC Investment 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 DSC Investment with a short position of Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of DSC Investment and Grand Korea.
Diversification Opportunities for DSC Investment and Grand Korea
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DSC and Grand is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding DSC Investment 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 DSC Investment 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 DSC Investment 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 DSC Investment i.e., DSC Investment and Grand Korea go up and down completely randomly.
Pair Corralation between DSC Investment and Grand Korea
Assuming the 90 days trading horizon DSC Investment is expected to under-perform the Grand Korea. But the stock apears to be less risky and, when comparing its historical volatility, DSC Investment is 1.33 times less risky than Grand Korea. The stock trades about -0.08 of its potential returns per unit of risk. The Grand Korea Leisure is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 1,135,000 in Grand Korea Leisure on October 17, 2024 and sell it today you would earn a total of 57,000 from holding Grand Korea Leisure or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DSC Investment vs. Grand Korea Leisure
Performance |
| Timeline |
| DSC Investment |
| Grand Korea Leisure |
DSC Investment and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DSC Investment and Grand Korea
The main advantage of trading using opposite DSC Investment and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DSC Investment 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.| DSC Investment vs. Cube Entertainment | DSC Investment vs. MEDIANA CoLtd | DSC Investment vs. Hanmi Semiconductor Co | DSC Investment vs. Tamul Multimedia Co |
| Grand Korea vs. Golden Bridge Investment | Grand Korea vs. DSC Investment | Grand Korea vs. Daol Investment Securities | Grand Korea vs. KTB Investment Securities |
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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