Correlation Between Homecast CoLtd and Genic
Can any of the company-specific risk be diversified away by investing in both Homecast CoLtd and Genic 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 Homecast CoLtd and Genic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Homecast CoLtd and Genic Co, you can compare the effects of market volatilities on Homecast CoLtd and Genic 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 Homecast CoLtd with a short position of Genic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Homecast CoLtd and Genic.
Diversification Opportunities for Homecast CoLtd and Genic
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Homecast and Genic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Homecast CoLtd and Genic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genic and Homecast CoLtd 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 Homecast CoLtd are associated (or correlated) with Genic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genic has no effect on the direction of Homecast CoLtd i.e., Homecast CoLtd and Genic go up and down completely randomly.
Pair Corralation between Homecast CoLtd and Genic
Assuming the 90 days trading horizon Homecast CoLtd is expected to generate 0.52 times more return on investment than Genic. However, Homecast CoLtd is 1.92 times less risky than Genic. It trades about -0.1 of its potential returns per unit of risk. Genic Co is currently generating about -0.19 per unit of risk. If you would invest 223,000 in Homecast CoLtd on November 6, 2024 and sell it today you would lose (11,000) from holding Homecast CoLtd or give up 4.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Homecast CoLtd vs. Genic Co
Performance |
| Timeline |
| Homecast CoLtd |
| Genic |
Homecast CoLtd and Genic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Homecast CoLtd and Genic
The main advantage of trading using opposite Homecast CoLtd and Genic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Homecast CoLtd position performs unexpectedly, Genic 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 Genic will offset losses from the drop in Genic's long position.| Homecast CoLtd vs. Kg Chemical | Homecast CoLtd vs. Ssangyong Information Communication | Homecast CoLtd vs. Tae Kyung Chemical | Homecast CoLtd vs. TK Chemical |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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