Correlation Between Sungchang Autotech and Genie Music
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech 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 Sungchang Autotech and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and Genie Music, you can compare the effects of market volatilities on Sungchang Autotech 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 Sungchang Autotech with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and Genie Music.
Diversification Opportunities for Sungchang Autotech and Genie Music
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sungchang and Genie is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Sungchang Autotech 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 Sungchang Autotech Co 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 Sungchang Autotech i.e., Sungchang Autotech and Genie Music go up and down completely randomly.
Pair Corralation between Sungchang Autotech and Genie Music
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to generate 0.73 times more return on investment than Genie Music. However, Sungchang Autotech Co is 1.36 times less risky than Genie Music. It trades about -0.01 of its potential returns per unit of risk. Genie Music is currently generating about -0.03 per unit of risk. If you would invest 393,000 in Sungchang Autotech Co on September 21, 2024 and sell it today you would lose (26,000) from holding Sungchang Autotech Co or give up 6.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. Genie Music
Performance |
| Timeline |
| Sungchang Autotech |
| Genie Music |
Sungchang Autotech and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and Genie Music
The main advantage of trading using opposite Sungchang Autotech and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech 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.| Sungchang Autotech vs. Duksan Hi Metal | Sungchang Autotech vs. Youngsin Metal Industrial | Sungchang Autotech vs. Heungkuk Metaltech CoLtd | Sungchang Autotech vs. Display Tech Co |
| Genie Music vs. LG Household Healthcare | Genie Music vs. Daishin Information Communications | Genie Music vs. CG Hi Tech | Genie Music vs. BIT Computer 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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