Correlation Between DB Financial and Genie Music
Can any of the company-specific risk be diversified away by investing in both DB Financial 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 DB Financial and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DB Financial Investment and Genie Music, you can compare the effects of market volatilities on DB Financial 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 DB Financial with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of DB Financial and Genie Music.
Diversification Opportunities for DB Financial and Genie Music
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 016610 and Genie is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DB Financial Investment and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and DB Financial 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 DB Financial Investment 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 DB Financial i.e., DB Financial and Genie Music go up and down completely randomly.
Pair Corralation between DB Financial and Genie Music
Assuming the 90 days trading horizon DB Financial Investment is expected to generate 0.5 times more return on investment than Genie Music. However, DB Financial Investment is 2.0 times less risky than Genie Music. It trades about -0.17 of its potential returns per unit of risk. Genie Music is currently generating about -0.13 per unit of risk. If you would invest 540,000 in DB Financial Investment on October 16, 2024 and sell it today you would lose (18,000) from holding DB Financial Investment or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DB Financial Investment vs. Genie Music
Performance |
| Timeline |
| DB Financial Investment |
| Genie Music |
DB Financial and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DB Financial and Genie Music
The main advantage of trading using opposite DB Financial and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DB Financial 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.| DB Financial vs. Lotte Non Life Insurance | DB Financial vs. EBEST Investment Securities | DB Financial vs. Alton Sports CoLtd | DB Financial vs. LG Display Co |
| Genie Music vs. DB Financial Investment | Genie Music vs. Cloud Air CoLtd | Genie Music vs. Homecast CoLtd | Genie Music vs. Jeju Air 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |