Correlation Between Vissem Electronics and Grand Korea

Can any of the company-specific risk be diversified away by investing in both Vissem Electronics 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 Vissem Electronics and Grand Korea into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vissem Electronics Co and Grand Korea Leisure, you can compare the effects of market volatilities on Vissem Electronics 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 Vissem Electronics with a short position of Grand Korea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vissem Electronics and Grand Korea.

Diversification Opportunities for Vissem Electronics and Grand Korea

-0.17

Correlation Coefficient

Vissem Electronics  Grand Korea

Good diversification

The 3 months correlation between Vissem and Grand is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Vissem Electronics Co 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 Vissem Electronics 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 Vissem Electronics Co 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 Vissem Electronics i.e., Vissem Electronics and Grand Korea go up and down completely randomly.

Pair Corralation between Vissem Electronics and Grand Korea

Assuming the 90 days trading horizon Vissem Electronics Co is expected to under-perform the Grand Korea. In addition to that, Vissem Electronics is 1.8 times more volatile than Grand Korea Leisure. It trades about -0.11 of its total potential returns per unit of risk. Grand Korea Leisure is currently generating about 0.18 per unit of volatility. If you would invest  1,340,000  in Grand Korea Leisure on February 2, 2024 and sell it today you would earn a total of  84,000  from holding Grand Korea Leisure or generate 6.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Vissem Electronics Co  vs.  Grand Korea Leisure

Vissem Electronics

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vissem Electronics Co are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vissem Electronics may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Grand Korea Leisure

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Korea Leisure are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Grand Korea sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Vissem Electronics and Grand Korea

The main advantage of trading using opposite Vissem Electronics and Grand Korea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vissem Electronics 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.

The idea behind Vissem Electronics Co and Grand Korea Leisure pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.