Correlation Between Kyeryong Construction and Genie Music
Can any of the company-specific risk be diversified away by investing in both Kyeryong 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 Kyeryong 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 Kyeryong Construction Industrial and Genie Music, you can compare the effects of market volatilities on Kyeryong 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 Kyeryong Construction with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyeryong Construction and Genie Music.
Diversification Opportunities for Kyeryong Construction and Genie Music
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kyeryong and Genie is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kyeryong Construction Industri and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Kyeryong 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 Kyeryong Construction Industrial 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 Kyeryong Construction i.e., Kyeryong Construction and Genie Music go up and down completely randomly.
Pair Corralation between Kyeryong Construction and Genie Music
Assuming the 90 days trading horizon Kyeryong Construction is expected to generate 1.88 times less return on investment than Genie Music. But when comparing it to its historical volatility, Kyeryong Construction Industrial is 2.1 times less risky than Genie Music. It trades about 0.06 of its potential returns per unit of risk. Genie Music is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 215,000 in Genie Music on September 21, 2024 and sell it today you would earn a total of 6,500 from holding Genie Music or generate 3.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyeryong Construction Industri vs. Genie Music
Performance |
| Timeline |
| Kyeryong Construction |
| Genie Music |
Kyeryong Construction and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyeryong Construction and Genie Music
The main advantage of trading using opposite Kyeryong Construction and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyeryong 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.The idea behind Kyeryong Construction Industrial and Genie Music 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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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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