Correlation Between Grand Korea and Myoung Shin
Can any of the company-specific risk be diversified away by investing in both Grand Korea and Myoung Shin 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 Myoung Shin 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 Myoung Shin Industrial, you can compare the effects of market volatilities on Grand Korea and Myoung Shin 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 Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Korea and Myoung Shin.
Diversification Opportunities for Grand Korea and Myoung Shin
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Grand and Myoung is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Grand Korea Leisure and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial 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 Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of Grand Korea i.e., Grand Korea and Myoung Shin go up and down completely randomly.
Pair Corralation between Grand Korea and Myoung Shin
Assuming the 90 days trading horizon Grand Korea Leisure is expected to generate 0.56 times more return on investment than Myoung Shin. However, Grand Korea Leisure is 1.8 times less risky than Myoung Shin. It trades about 0.05 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.17 per unit of risk. If you would invest 1,120,000 in Grand Korea Leisure on October 6, 2024 and sell it today you would earn a total of 35,000 from holding Grand Korea Leisure or generate 3.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Grand Korea Leisure vs. Myoung Shin Industrial
Performance |
Timeline |
Grand Korea Leisure |
Myoung Shin Industrial |
Grand Korea and Myoung Shin Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Grand Korea and Myoung Shin
The main advantage of trading using opposite Grand Korea and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Korea position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.Grand Korea vs. Busan Industrial Co | Grand Korea vs. Busan Ind | Grand Korea vs. Shinhan WTI Futures | Grand Korea vs. UNISEM Co |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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