Correlation Between Genie Music and HANA Micron
Can any of the company-specific risk be diversified away by investing in both Genie Music and HANA Micron 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 HANA Micron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and HANA Micron, you can compare the effects of market volatilities on Genie Music and HANA Micron 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 HANA Micron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and HANA Micron.
Diversification Opportunities for Genie Music and HANA Micron
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Genie and HANA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and HANA Micron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HANA Micron 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 HANA Micron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HANA Micron has no effect on the direction of Genie Music i.e., Genie Music and HANA Micron go up and down completely randomly.
Pair Corralation between Genie Music and HANA Micron
Assuming the 90 days trading horizon Genie Music is expected to generate 1.19 times more return on investment than HANA Micron. However, Genie Music is 1.19 times more volatile than HANA Micron. It trades about 0.01 of its potential returns per unit of risk. HANA Micron 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. HANA Micron
Performance |
| Timeline |
| Genie Music |
| HANA Micron |
Genie Music and HANA Micron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and HANA Micron
The main advantage of trading using opposite Genie Music and HANA Micron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, HANA Micron 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 HANA Micron will offset losses from the drop in HANA Micron'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 |
| HANA Micron vs. TJ media Co | HANA Micron vs. DB Insurance Co | HANA Micron vs. Genie Music | HANA Micron vs. Samsung Life Insurance |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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