Correlation Between Genie Music and Solus Advanced
Can any of the company-specific risk be diversified away by investing in both Genie Music and Solus Advanced 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 Solus Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genie Music and Solus Advanced Materials, you can compare the effects of market volatilities on Genie Music and Solus Advanced 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 Solus Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genie Music and Solus Advanced.
Diversification Opportunities for Genie Music and Solus Advanced
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Genie and Solus is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Genie Music and Solus Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solus Advanced Materials 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 Solus Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solus Advanced Materials has no effect on the direction of Genie Music i.e., Genie Music and Solus Advanced go up and down completely randomly.
Pair Corralation between Genie Music and Solus Advanced
Assuming the 90 days trading horizon Genie Music is expected to generate 1.03 times more return on investment than Solus Advanced. However, Genie Music is 1.03 times more volatile than Solus Advanced Materials. It trades about -0.26 of its potential returns per unit of risk. Solus Advanced Materials is currently generating about -0.37 per unit of risk. If you would invest 259,000 in Genie Music on August 29, 2024 and sell it today you would lose (42,000) from holding Genie Music or give up 16.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genie Music vs. Solus Advanced Materials
Performance |
| Timeline |
| Genie Music |
| Solus Advanced Materials |
Genie Music and Solus Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genie Music and Solus Advanced
The main advantage of trading using opposite Genie Music and Solus Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genie Music position performs unexpectedly, Solus Advanced 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 Solus Advanced will offset losses from the drop in Solus Advanced's long position.| Genie Music vs. Korea New Network | Genie Music vs. Busan Industrial Co | Genie Music vs. Busan Ind | Genie Music vs. Shinhan WTI Futures |
| Solus Advanced vs. Sewoon Medical Co | Solus Advanced vs. Genie Music | Solus Advanced vs. Daou Technology | Solus Advanced vs. Hana Technology 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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