Correlation Between Insung Information and Genie Music
Can any of the company-specific risk be diversified away by investing in both Insung Information 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 Insung Information and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insung Information Co and Genie Music, you can compare the effects of market volatilities on Insung Information 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 Insung Information with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insung Information and Genie Music.
Diversification Opportunities for Insung Information and Genie Music
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Insung and Genie is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Insung Information Co and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Insung Information 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 Insung Information 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 Insung Information i.e., Insung Information and Genie Music go up and down completely randomly.
Pair Corralation between Insung Information and Genie Music
Assuming the 90 days trading horizon Insung Information Co is expected to generate 1.32 times more return on investment than Genie Music. However, Insung Information is 1.32 times more volatile than Genie Music. It trades about 0.17 of its potential returns per unit of risk. Genie Music is currently generating about -0.08 per unit of risk. If you would invest 174,800 in Insung Information Co on October 28, 2024 and sell it today you would earn a total of 13,500 from holding Insung Information Co or generate 7.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insung Information Co vs. Genie Music
Performance |
| Timeline |
| Insung Information |
| Genie Music |
Insung Information and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insung Information and Genie Music
The main advantage of trading using opposite Insung Information and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insung Information 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.| Insung Information vs. Solus Advanced Materials | Insung Information vs. Hyosung Advanced Materials | Insung Information vs. LAKE MATERIALS LTD | Insung Information vs. Alton Sports CoLtd |
| Genie Music vs. Busan Industrial Co | Genie Music vs. Busan Ind | Genie Music vs. RPBio Inc | Genie Music vs. Finebesteel |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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