Correlation Between INSUN Environmental and Genie Music
Can any of the company-specific risk be diversified away by investing in both INSUN Environmental 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 INSUN Environmental and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INSUN Environmental New and Genie Music, you can compare the effects of market volatilities on INSUN Environmental 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 INSUN Environmental with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of INSUN Environmental and Genie Music.
Diversification Opportunities for INSUN Environmental and Genie Music
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INSUN and Genie is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding INSUN Environmental New and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and INSUN Environmental 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 INSUN Environmental New 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 INSUN Environmental i.e., INSUN Environmental and Genie Music go up and down completely randomly.
Pair Corralation between INSUN Environmental and Genie Music
Assuming the 90 days trading horizon INSUN Environmental New is expected to generate 0.62 times more return on investment than Genie Music. However, INSUN Environmental New is 1.61 times less risky than Genie Music. It trades about -0.05 of its potential returns per unit of risk. Genie Music is currently generating about -0.04 per unit of risk. If you would invest 880,000 in INSUN Environmental New on November 2, 2024 and sell it today you would lose (321,000) from holding INSUN Environmental New or give up 36.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INSUN Environmental New vs. Genie Music
Performance |
| Timeline |
| INSUN Environmental New |
| Genie Music |
INSUN Environmental and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INSUN Environmental and Genie Music
The main advantage of trading using opposite INSUN Environmental and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INSUN Environmental 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.| INSUN Environmental vs. Korea Environment Technology | INSUN Environmental vs. Paradise Co | INSUN Environmental vs. Seoul Semiconductor Co | INSUN Environmental vs. JUSUNG ENGINEERING Co |
| Genie Music vs. Kolon Plastics | Genie Music vs. National Plastic Co | Genie Music vs. Homecast CoLtd | Genie Music vs. Ssangyong Information Communication |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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