Correlation Between Genie Music and Seoul Food
Can any of the company-specific risk be diversified away by investing in both Genie Music and Seoul Food 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 Seoul Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and Seoul Food Industrial, you can compare the effects of market volatilities on Genie Music and Seoul Food 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 Seoul Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and Seoul Food.
Diversification Opportunities for Genie Music and Seoul Food
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genie and Seoul is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and Seoul Food Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seoul Food Industrial 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 Seoul Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seoul Food Industrial has no effect on the direction of Genie Music i.e., Genie Music and Seoul Food go up and down completely randomly.
Pair Corralation between Genie Music and Seoul Food
Assuming the 90 days trading horizon Genie Music is expected to generate 1.88 times more return on investment than Seoul Food. However, Genie Music is 1.88 times more volatile than Seoul Food Industrial. It trades about 0.01 of its potential returns per unit of risk. Seoul Food Industrial is currently generating about 0.01 per unit of risk. If you would invest 208,500 in Genie Music on September 14, 2024 and sell it today you would lose (500.00) from holding Genie Music or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. Seoul Food Industrial
Performance |
| Timeline |
| Genie Music |
| Seoul Food Industrial |
Genie Music and Seoul Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and Seoul Food
The main advantage of trading using opposite Genie Music and Seoul Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, Seoul Food 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 Seoul Food will offset losses from the drop in Seoul Food's long position.| Genie Music vs. WooDeumGee Farm Co, | Genie Music vs. Dongwoo Farm To | Genie Music vs. SungMoon Electronics Co | Genie Music vs. Cuckoo Electronics Co |
| Seoul Food vs. Samsung Electronics Co | Seoul Food vs. Samsung Electronics Co | Seoul Food vs. SK Hynix | Seoul Food vs. POSCO Holdings |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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