Correlation Between National Plastic and Genic
Can any of the company-specific risk be diversified away by investing in both National Plastic and Genic 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 National Plastic and Genic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Plastic Co and Genic Co, you can compare the effects of market volatilities on National Plastic and Genic 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 National Plastic with a short position of Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Plastic and Genic.
Diversification Opportunities for National Plastic and Genic
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Genic is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National Plastic Co and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic and National Plastic 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 National Plastic Co are associated (or correlated) with Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of National Plastic i.e., National Plastic and Genic go up and down completely randomly.
Pair Corralation between National Plastic and Genic
Assuming the 90 days trading horizon National Plastic Co is expected to under-perform the Genic. But the stock apears to be less risky and, when comparing its historical volatility, National Plastic Co is 6.53 times less risky than Genic. The stock trades about -0.41 of its potential returns per unit of risk. The Genic Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,295,000 in Genic Co on October 30, 2024 and sell it today you would earn a total of 35,000 from holding Genic Co or generate 1.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Plastic Co vs. Genic Co
Performance |
| Timeline |
| National Plastic |
| Genic |
National Plastic and Genic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Plastic and Genic
The main advantage of trading using opposite National Plastic and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Plastic position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.| National Plastic vs. HYBE Co | National Plastic vs. Busan Industrial Co | National Plastic vs. Busan Ind | National Plastic vs. Mirae Asset Daewoo |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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