Correlation Between Hanshin Construction and Genie Music
Can any of the company-specific risk be diversified away by investing in both Hanshin Construction 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 Hanshin Construction and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hanshin Construction Co and Genie Music, you can compare the effects of market volatilities on Hanshin Construction 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 Hanshin Construction with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hanshin Construction and Genie Music.
Diversification Opportunities for Hanshin Construction and Genie Music
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Hanshin and Genie is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Hanshin Construction Co and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Hanshin Construction 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 Hanshin Construction Co 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 Hanshin Construction i.e., Hanshin Construction and Genie Music go up and down completely randomly.
Pair Corralation between Hanshin Construction and Genie Music
Assuming the 90 days trading horizon Hanshin Construction Co is expected to under-perform the Genie Music. But the stock apears to be less risky and, when comparing its historical volatility, Hanshin Construction Co is 1.64 times less risky than Genie Music. The stock trades about -0.16 of its potential returns per unit of risk. The Genie Music is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 218,500 in Genie Music on September 28, 2024 and sell it today you would lose (3,500) from holding Genie Music or give up 1.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hanshin Construction Co vs. Genie Music
Performance |
| Timeline |
| Hanshin Construction |
| Genie Music |
Hanshin Construction and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hanshin Construction and Genie Music
The main advantage of trading using opposite Hanshin Construction and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hanshin Construction 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.| Hanshin Construction vs. Miwon Chemical | Hanshin Construction vs. Korean Air Lines | Hanshin Construction vs. Youngchang Chemical Co | Hanshin Construction vs. Korea Air Svc |
| Genie Music vs. Hanshin Construction Co | Genie Music vs. GS Engineering Construction | Genie Music vs. Duksan Hi Metal | Genie Music vs. MetaLabs Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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