Correlation Between Busan Ind and Genie Music
Can any of the company-specific risk be diversified away by investing in both Busan Ind 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 Busan Ind and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Busan Ind and Genie Music, you can compare the effects of market volatilities on Busan Ind 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 Busan Ind with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Busan Ind and Genie Music.
Diversification Opportunities for Busan Ind and Genie Music
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Busan and Genie is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Busan Ind and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Busan Ind 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 Busan Ind 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 Busan Ind i.e., Busan Ind and Genie Music go up and down completely randomly.
Pair Corralation between Busan Ind and Genie Music
Assuming the 90 days trading horizon Busan Ind is expected to generate 2.98 times more return on investment than Genie Music. However, Busan Ind is 2.98 times more volatile than Genie Music. It trades about 0.05 of its potential returns per unit of risk. Genie Music is currently generating about -0.17 per unit of risk. If you would invest 6,220,000 in Busan Ind on August 30, 2024 and sell it today you would earn a total of 150,000 from holding Busan Ind or generate 2.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Busan Ind vs. Genie Music
Performance |
| Timeline |
| Busan Ind |
| Genie Music |
Busan Ind and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Busan Ind and Genie Music
The main advantage of trading using opposite Busan Ind and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Busan Ind 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.| Busan Ind vs. Sangshin Electronics Co | Busan Ind vs. SungMoon Electronics Co | Busan Ind vs. ABCO Electronics Co | Busan Ind vs. Okins Electronics Co |
| Genie Music vs. Finebesteel | Genie Music vs. People Technology | Genie Music vs. Gyeongnam Steel Co | Genie Music vs. Hwangkum Steel Technology |
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 CEOs Directory module to screen CEOs from public companies around the world.
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