Correlation Between Genie Music and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both Genie Music and Shinsegae 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 Shinsegae 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 Shinsegae Food, you can compare the effects of market volatilities on Genie Music and Shinsegae 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 Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and Shinsegae Food.
Diversification Opportunities for Genie Music and Shinsegae Food
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genie and Shinsegae is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food 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 Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of Genie Music i.e., Genie Music and Shinsegae Food go up and down completely randomly.
Pair Corralation between Genie Music and Shinsegae Food
Assuming the 90 days trading horizon Genie Music is expected to under-perform the Shinsegae Food. In addition to that, Genie Music is 1.91 times more volatile than Shinsegae Food. It trades about -0.04 of its total potential returns per unit of risk. Shinsegae Food is currently generating about -0.05 per unit of volatility. If you would invest 3,887,153 in Shinsegae Food on September 14, 2024 and sell it today you would lose (752,153) from holding Shinsegae Food or give up 19.35% 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. Shinsegae Food
Performance |
| Timeline |
| Genie Music |
| Shinsegae Food |
Genie Music and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and Shinsegae Food
The main advantage of trading using opposite Genie Music and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, Shinsegae 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 Shinsegae Food will offset losses from the drop in Shinsegae 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 |
| Shinsegae Food vs. Daou Data Corp | Shinsegae Food vs. Solution Advanced Technology | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. Busan Ind |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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