Correlation Between Daewoo Engineering and Genie Music
Can any of the company-specific risk be diversified away by investing in both Daewoo Engineering and Genie Music 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 Daewoo Engineering and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo Engineering Construction and Genie Music, you can compare the effects of market volatilities on Daewoo Engineering and Genie Music 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 Daewoo Engineering with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo Engineering and Genie Music.
Diversification Opportunities for Daewoo Engineering and Genie Music
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daewoo and Genie is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo Engineering Constructio and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Daewoo Engineering 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 Daewoo Engineering Construction are associated (or correlated) with Genie Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genie Music has no effect on the direction of Daewoo Engineering i.e., Daewoo Engineering and Genie Music go up and down completely randomly.
Pair Corralation between Daewoo Engineering and Genie Music
Assuming the 90 days trading horizon Daewoo Engineering Construction is expected to generate 1.05 times more return on investment than Genie Music. However, Daewoo Engineering is 1.05 times more volatile than Genie Music. It trades about 0.14 of its potential returns per unit of risk. Genie Music is currently generating about -0.21 per unit of risk. If you would invest 323,500 in Daewoo Engineering Construction on November 5, 2024 and sell it today you would earn a total of 14,000 from holding Daewoo Engineering Construction or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo Engineering Constructio vs. Genie Music
Performance |
| Timeline |
| Daewoo Engineering |
| Genie Music |
Daewoo Engineering and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo Engineering and Genie Music
The main advantage of trading using opposite Daewoo Engineering and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo Engineering position performs unexpectedly, Genie Music 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 Genie Music will offset losses from the drop in Genie Music's long position.| Daewoo Engineering vs. Samsung Card Co | Daewoo Engineering vs. EBEST Investment Securities | Daewoo Engineering vs. Koh Young Technology | Daewoo Engineering vs. Hansol Chemica |
| Genie Music vs. Hotel Shilla Co | Genie Music vs. DB Financial Investment | Genie Music vs. Echomarketing CoLtd | Genie Music vs. KakaoBank Corp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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