Correlation Between Genie Music and Air Busan
Can any of the company-specific risk be diversified away by investing in both Genie Music and Air Busan 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 Air Busan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and Air Busan Co, you can compare the effects of market volatilities on Genie Music and Air Busan 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 Air Busan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and Air Busan.
Diversification Opportunities for Genie Music and Air Busan
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genie and Air is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and Air Busan Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air Busan 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 Air Busan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air Busan has no effect on the direction of Genie Music i.e., Genie Music and Air Busan go up and down completely randomly.
Pair Corralation between Genie Music and Air Busan
Assuming the 90 days trading horizon Genie Music is expected to under-perform the Air Busan. In addition to that, Genie Music is 1.57 times more volatile than Air Busan Co. It trades about -0.14 of its total potential returns per unit of risk. Air Busan Co is currently generating about 0.14 per unit of volatility. If you would invest 223,500 in Air Busan Co on October 24, 2024 and sell it today you would earn a total of 7,000 from holding Air Busan Co or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. Air Busan Co
Performance |
| Timeline |
| Genie Music |
| Air Busan |
Genie Music and Air Busan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and Air Busan
The main advantage of trading using opposite Genie Music and Air Busan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, Air Busan 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 Air Busan will offset losses from the drop in Air Busan's long position.| Genie Music vs. Okins Electronics Co | Genie Music vs. Vissem Electronics Co | Genie Music vs. Korea Electronic Certification | Genie Music vs. Korean Drug Co |
| Air Busan vs. Kukil Metal Co | Air Busan vs. Duksan Hi Metal | Air Busan vs. Seoul Electronics Telecom | Air Busan vs. Hyundai Industrial 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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