Correlation Between Genie Music and SK Hynix
Can any of the company-specific risk be diversified away by investing in both Genie Music and SK Hynix 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 Genie Music and SK Hynix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and SK Hynix, you can compare the effects of market volatilities on Genie Music and SK Hynix 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 Genie Music with a short position of SK Hynix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and SK Hynix.
Diversification Opportunities for Genie Music and SK Hynix
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genie and 000660 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and SK Hynix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SK Hynix and Genie Music 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 Genie Music are associated (or correlated) with SK Hynix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SK Hynix has no effect on the direction of Genie Music i.e., Genie Music and SK Hynix go up and down completely randomly.
Pair Corralation between Genie Music and SK Hynix
Assuming the 90 days trading horizon Genie Music is expected to generate 1.55 times more return on investment than SK Hynix. However, Genie Music is 1.55 times more volatile than SK Hynix. It trades about 0.05 of its potential returns per unit of risk. SK Hynix is currently generating about -0.07 per unit of risk. If you would invest 212,000 in Genie Music on September 26, 2024 and sell it today you would earn a total of 6,000 from holding Genie Music or generate 2.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. SK Hynix
Performance |
| Timeline |
| Genie Music |
| SK Hynix |
Genie Music and SK Hynix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and SK Hynix
The main advantage of trading using opposite Genie Music and SK Hynix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, SK Hynix 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 SK Hynix will offset losses from the drop in SK Hynix's long position.| Genie Music vs. Samyang Foods Co | Genie Music vs. Ssangyong Materials Corp | Genie Music vs. EV Advanced Material | Genie Music vs. Organic Special Pet |
| SK Hynix vs. Dongsin Engineering Construction | SK Hynix vs. Doosan Fuel Cell | SK Hynix vs. Daishin Balance 1 | SK Hynix vs. Total Soft Bank |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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