Correlation Between Genie Music and Hyundai BNG
Can any of the company-specific risk be diversified away by investing in both Genie Music and Hyundai BNG 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 Hyundai BNG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and Hyundai BNG Steel, you can compare the effects of market volatilities on Genie Music and Hyundai BNG 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 Hyundai BNG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and Hyundai BNG.
Diversification Opportunities for Genie Music and Hyundai BNG
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genie and Hyundai is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and Hyundai BNG Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai BNG Steel 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 Hyundai BNG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai BNG Steel has no effect on the direction of Genie Music i.e., Genie Music and Hyundai BNG go up and down completely randomly.
Pair Corralation between Genie Music and Hyundai BNG
Assuming the 90 days trading horizon Genie Music is expected to under-perform the Hyundai BNG. But the stock apears to be less risky and, when comparing its historical volatility, Genie Music is 1.47 times less risky than Hyundai BNG. The stock trades about -0.04 of its potential returns per unit of risk. The Hyundai BNG Steel is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,097,000 in Hyundai BNG Steel on November 2, 2024 and sell it today you would earn a total of 161,000 from holding Hyundai BNG Steel or generate 14.68% 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. Hyundai BNG Steel
Performance |
| Timeline |
| Genie Music |
| Hyundai BNG Steel |
Genie Music and Hyundai BNG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and Hyundai BNG
The main advantage of trading using opposite Genie Music and Hyundai BNG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, Hyundai BNG 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 Hyundai BNG will offset losses from the drop in Hyundai BNG's long position.| Genie Music vs. Kolon Plastics | Genie Music vs. National Plastic Co | Genie Music vs. Homecast CoLtd | Genie Music vs. Ssangyong Information Communication |
| Hyundai BNG vs. Cuckoo Electronics Co | Hyundai BNG vs. Samsung Electronics Co | Hyundai BNG vs. KyungIn Electronics Co | Hyundai BNG vs. Sungmoon Electronics 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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