Correlation Between Genie Music and Kyeryong Construction
Can any of the company-specific risk be diversified away by investing in both Genie Music and Kyeryong Construction 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 Kyeryong Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and Kyeryong Construction Industrial, you can compare the effects of market volatilities on Genie Music and Kyeryong Construction 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 Kyeryong Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and Kyeryong Construction.
Diversification Opportunities for Genie Music and Kyeryong Construction
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genie and Kyeryong is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and Kyeryong Construction Industri in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kyeryong Construction 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 Kyeryong Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kyeryong Construction has no effect on the direction of Genie Music i.e., Genie Music and Kyeryong Construction go up and down completely randomly.
Pair Corralation between Genie Music and Kyeryong Construction
Assuming the 90 days trading horizon Genie Music is expected to under-perform the Kyeryong Construction. In addition to that, Genie Music is 2.43 times more volatile than Kyeryong Construction Industrial. It trades about -0.03 of its total potential returns per unit of risk. Kyeryong Construction Industrial is currently generating about -0.06 per unit of volatility. If you would invest 1,471,000 in Kyeryong Construction Industrial on September 21, 2024 and sell it today you would lose (152,000) from holding Kyeryong Construction Industrial or give up 10.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. Kyeryong Construction Industri
Performance |
| Timeline |
| Genie Music |
| Kyeryong Construction |
Genie Music and Kyeryong Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and Kyeryong Construction
The main advantage of trading using opposite Genie Music and Kyeryong Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, Kyeryong Construction 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 Kyeryong Construction will offset losses from the drop in Kyeryong Construction's long position.| Genie Music vs. LG Household Healthcare | Genie Music vs. Daishin Information Communications | Genie Music vs. CG Hi Tech | Genie Music vs. BIT Computer 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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