Correlation Between Genie Music and Cheryong Industrial
Can any of the company-specific risk be diversified away by investing in both Genie Music and Cheryong Industrial 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 Cheryong Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and Cheryong Industrial CoLtd, you can compare the effects of market volatilities on Genie Music and Cheryong Industrial 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 Cheryong Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and Cheryong Industrial.
Diversification Opportunities for Genie Music and Cheryong Industrial
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genie and Cheryong is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and Cheryong Industrial CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheryong Industrial CoLtd 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 Cheryong Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheryong Industrial CoLtd has no effect on the direction of Genie Music i.e., Genie Music and Cheryong Industrial go up and down completely randomly.
Pair Corralation between Genie Music and Cheryong Industrial
Assuming the 90 days trading horizon Genie Music is expected to under-perform the Cheryong Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Genie Music is 1.21 times less risky than Cheryong Industrial. The stock trades about -0.33 of its potential returns per unit of risk. The Cheryong Industrial CoLtd is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 620,000 in Cheryong Industrial CoLtd on August 27, 2024 and sell it today you would lose (49,000) from holding Cheryong Industrial CoLtd or give up 7.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. Cheryong Industrial CoLtd
Performance |
| Timeline |
| Genie Music |
| Cheryong Industrial CoLtd |
Genie Music and Cheryong Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and Cheryong Industrial
The main advantage of trading using opposite Genie Music and Cheryong Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, Cheryong Industrial 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 Cheryong Industrial will offset losses from the drop in Cheryong Industrial's long position.| Genie Music vs. AfreecaTV Co | Genie Music vs. SS TECH | Genie Music vs. Busan Industrial Co | Genie Music vs. Busan Ind |
| Cheryong Industrial vs. LG Household Healthcare | Cheryong Industrial vs. SH Energy Chemical | Cheryong Industrial vs. Echomarketing CoLtd | Cheryong Industrial vs. TK Chemical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |