Correlation Between Grom Social and Hanryu Holdings

Can any of the company-specific risk be diversified away by investing in both Grom Social and Hanryu Holdings 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 Grom Social and Hanryu Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Grom Social Enterprises and Hanryu Holdings Common, you can compare the effects of market volatilities on Grom Social and Hanryu Holdings 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 Grom Social with a short position of Hanryu Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grom Social and Hanryu Holdings.

Diversification Opportunities for Grom Social and Hanryu Holdings

-0.64

Correlation Coefficient

Grom Social  Hanryu Holdings

Excellent diversification

The 3 months correlation between Grom and Hanryu is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Grom Social Enterprises and Hanryu Holdings Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanryu Holdings Common and Grom Social 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 Grom Social Enterprises are associated (or correlated) with Hanryu Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanryu Holdings Common has no effect on the direction of Grom Social i.e., Grom Social and Hanryu Holdings go up and down completely randomly.

Pair Corralation between Grom Social and Hanryu Holdings

Given the investment horizon of 90 days Grom Social Enterprises is expected to under-perform the Hanryu Holdings. In addition to that, Grom Social is 1.03 times more volatile than Hanryu Holdings Common. It trades about -0.03 of its total potential returns per unit of risk. Hanryu Holdings Common is currently generating about 0.04 per unit of volatility. If you would invest  44.00  in Hanryu Holdings Common on February 23, 2024 and sell it today you would lose (1.00) from holding Hanryu Holdings Common or give up 2.27% of portfolio value over 90 days.

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

Grom Social Enterprises  vs.  Hanryu Holdings Common

Grom Social Enterprises

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grom Social Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Hanryu Holdings Common

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hanryu Holdings Common are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Hanryu Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grom Social and Hanryu Holdings

The main advantage of trading using opposite Grom Social and Hanryu Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grom Social position performs unexpectedly, Hanryu Holdings 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 Hanryu Holdings will offset losses from the drop in Hanryu Holdings' long position.

The idea behind Grom Social Enterprises and Hanryu Holdings Common 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.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.