Correlation Between Global Standard and Genie Music
Can any of the company-specific risk be diversified away by investing in both Global Standard 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 Global Standard and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Standard Technology and Genie Music, you can compare the effects of market volatilities on Global Standard 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 Global Standard with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Standard and Genie Music.
Diversification Opportunities for Global Standard and Genie Music
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Global and Genie is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Global Standard Technology and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Global Standard 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 Global Standard Technology 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 Global Standard i.e., Global Standard and Genie Music go up and down completely randomly.
Pair Corralation between Global Standard and Genie Music
Assuming the 90 days trading horizon Global Standard Technology is expected to generate 1.1 times more return on investment than Genie Music. However, Global Standard is 1.1 times more volatile than Genie Music. It trades about 0.05 of its potential returns per unit of risk. Genie Music is currently generating about 0.0 per unit of risk. If you would invest 1,497,011 in Global Standard Technology on November 7, 2024 and sell it today you would earn a total of 192,989 from holding Global Standard Technology or generate 12.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Standard Technology vs. Genie Music
Performance |
| Timeline |
| Global Standard Tech |
| Genie Music |
Global Standard and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Standard and Genie Music
The main advantage of trading using opposite Global Standard and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Standard 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.| Global Standard vs. Iljin Display | Global Standard vs. Bookook Steel | Global Standard vs. Finebesteel | Global Standard vs. BooKook Steel Co |
| Genie Music vs. DoubleU Games Co | Genie Music vs. Tuksu Engineering ConstructionLtd | Genie Music vs. Hanshin Construction Co | Genie Music vs. Haitai Confectionery Foods |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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