Correlation Between Genic and National Plastic
Can any of the company-specific risk be diversified away by investing in both Genic and National Plastic 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 Genic and National Plastic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genic Co and National Plastic Co, you can compare the effects of market volatilities on Genic and National Plastic 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 Genic with a short position of National Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genic and National Plastic.
Diversification Opportunities for Genic and National Plastic
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Genic and National is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Genic Co and National Plastic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Plastic and Genic 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 Genic Co are associated (or correlated) with National Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Plastic has no effect on the direction of Genic i.e., Genic and National Plastic go up and down completely randomly.
Pair Corralation between Genic and National Plastic
Assuming the 90 days trading horizon Genic Co is expected to generate 3.06 times more return on investment than National Plastic. However, Genic is 3.06 times more volatile than National Plastic Co. It trades about 0.1 of its potential returns per unit of risk. National Plastic Co is currently generating about -0.03 per unit of risk. If you would invest 509,000 in Genic Co on October 16, 2024 and sell it today you would earn a total of 2,026,000 from holding Genic Co or generate 398.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Genic Co vs. National Plastic Co
Performance |
| Timeline |
| Genic |
| National Plastic |
Genic and National Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genic and National Plastic
The main advantage of trading using opposite Genic and National Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genic position performs unexpectedly, National Plastic 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 National Plastic will offset losses from the drop in National Plastic's long position.| Genic vs. National Plastic Co | Genic vs. Dong A Steel Technology | Genic vs. Korea Steel Co | Genic vs. LS Materials |
| National Plastic vs. Organic Special Pet | National Plastic vs. FOODWELL Co | National Plastic vs. Seoul Food Industrial | National Plastic vs. Samlip General 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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