Correlation Between Genie Music and IQuest
Can any of the company-specific risk be diversified away by investing in both Genie Music and IQuest 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 IQuest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and IQuest Co, you can compare the effects of market volatilities on Genie Music and IQuest 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 IQuest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and IQuest.
Diversification Opportunities for Genie Music and IQuest
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Genie and IQuest is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and IQuest Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IQuest 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 IQuest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IQuest has no effect on the direction of Genie Music i.e., Genie Music and IQuest go up and down completely randomly.
Pair Corralation between Genie Music and IQuest
Assuming the 90 days trading horizon Genie Music is expected to under-perform the IQuest. In addition to that, Genie Music is 1.12 times more volatile than IQuest Co. It trades about -0.03 of its total potential returns per unit of risk. IQuest Co is currently generating about -0.02 per unit of volatility. If you would invest 352,865 in IQuest Co on August 29, 2024 and sell it today you would lose (110,365) from holding IQuest Co or give up 31.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. IQuest Co
Performance |
| Timeline |
| Genie Music |
| IQuest |
Genie Music and IQuest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and IQuest
The main advantage of trading using opposite Genie Music and IQuest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, IQuest 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 IQuest will offset losses from the drop in IQuest's long position.| Genie Music vs. KakaoBank Corp | Genie Music vs. Dongbang Transport Logistics | Genie Music vs. Youngsin Metal Industrial | Genie Music vs. Koryo Credit Information |
| IQuest vs. iNtRON Biotechnology | IQuest vs. Ilji Technology Co | IQuest vs. Shinhan Inverse Silver | IQuest vs. Konan Technology |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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