Correlation Between Hyundai BNG and Genie Music
Can any of the company-specific risk be diversified away by investing in both Hyundai BNG and Genie Music 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 Hyundai BNG and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyundai BNG Steel and Genie Music, you can compare the effects of market volatilities on Hyundai BNG and Genie Music 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 Hyundai BNG with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyundai BNG and Genie Music.
Diversification Opportunities for Hyundai BNG and Genie Music
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyundai and Genie is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Hyundai BNG Steel and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Hyundai BNG 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 Hyundai BNG Steel are associated (or correlated) with Genie Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genie Music has no effect on the direction of Hyundai BNG i.e., Hyundai BNG and Genie Music go up and down completely randomly.
Pair Corralation between Hyundai BNG and Genie Music
Assuming the 90 days trading horizon Hyundai BNG Steel is expected to generate 1.47 times more return on investment than Genie Music. However, Hyundai BNG is 1.47 times more volatile than Genie Music. It trades about 0.03 of its potential returns per unit of risk. Genie Music is currently generating about -0.04 per unit of risk. If you would invest 1,097,000 in Hyundai BNG Steel on November 2, 2024 and sell it today you would earn a total of 161,000 from holding Hyundai BNG Steel or generate 14.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyundai BNG Steel vs. Genie Music
Performance |
| Timeline |
| Hyundai BNG Steel |
| Genie Music |
Hyundai BNG and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyundai BNG and Genie Music
The main advantage of trading using opposite Hyundai BNG and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyundai BNG position performs unexpectedly, Genie Music 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 Genie Music will offset losses from the drop in Genie Music's long position.| Hyundai BNG vs. Cuckoo Electronics Co | Hyundai BNG vs. Samsung Electronics Co | Hyundai BNG vs. KyungIn Electronics Co | Hyundai BNG vs. Sungmoon Electronics Co |
| Genie Music vs. Kolon Plastics | Genie Music vs. National Plastic Co | Genie Music vs. Homecast CoLtd | Genie Music vs. Ssangyong Information Communication |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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