Correlation Between Handok Clean and Grand Korea
Can any of the company-specific risk be diversified away by investing in both Handok Clean 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 Handok Clean and Grand Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Handok Clean Tech and Grand Korea Leisure, you can compare the effects of market volatilities on Handok Clean 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 Handok Clean with a short position of Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Grand Korea.
Diversification Opportunities for Handok Clean and Grand Korea
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Handok and Grand is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech 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 Handok Clean 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 Handok Clean Tech 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 Handok Clean i.e., Handok Clean and Grand Korea go up and down completely randomly.
Pair Corralation between Handok Clean and Grand Korea
Assuming the 90 days trading horizon Handok Clean Tech is expected to under-perform the Grand Korea. But the stock apears to be less risky and, when comparing its historical volatility, Handok Clean Tech is 2.69 times less risky than Grand Korea. The stock trades about -0.37 of its potential returns per unit of risk. The Grand Korea Leisure is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,140,000 in Grand Korea Leisure on September 2, 2024 and sell it today you would earn a total of 32,000 from holding Grand Korea Leisure or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Grand Korea Leisure
Performance |
| Timeline |
| Handok Clean Tech |
| Grand Korea Leisure |
Handok Clean and Grand Korea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Grand Korea
The main advantage of trading using opposite Handok Clean and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean 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.| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean vs. Finebesteel |
| Grand Korea vs. Busan Industrial Co | Grand Korea vs. Busan Ind | Grand Korea vs. Mirae Asset Daewoo | Grand Korea vs. Finebesteel |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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