Correlation Between GenoFocus and Korea Petro
Can any of the company-specific risk be diversified away by investing in both GenoFocus and Korea Petro 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 GenoFocus and Korea Petro into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GenoFocus and Korea Petro Chemical, you can compare the effects of market volatilities on GenoFocus and Korea Petro 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 GenoFocus with a short position of Korea Petro. Check out your portfolio center. Please also check ongoing floating volatility patterns of GenoFocus and Korea Petro.
Diversification Opportunities for GenoFocus and Korea Petro
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GenoFocus and Korea is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding GenoFocus and Korea Petro Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Petro Chemical and GenoFocus 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 GenoFocus are associated (or correlated) with Korea Petro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Petro Chemical has no effect on the direction of GenoFocus i.e., GenoFocus and Korea Petro go up and down completely randomly.
Pair Corralation between GenoFocus and Korea Petro
Assuming the 90 days trading horizon GenoFocus is expected to generate 1.3 times more return on investment than Korea Petro. However, GenoFocus is 1.3 times more volatile than Korea Petro Chemical. It trades about 0.02 of its potential returns per unit of risk. Korea Petro Chemical is currently generating about -0.04 per unit of risk. If you would invest 400,000 in GenoFocus on September 12, 2024 and sell it today you would earn a total of 13,000 from holding GenoFocus or generate 3.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
GenoFocus vs. Korea Petro Chemical
Performance |
| Timeline |
| GenoFocus |
| Korea Petro Chemical |
GenoFocus and Korea Petro Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GenoFocus and Korea Petro
The main advantage of trading using opposite GenoFocus and Korea Petro positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GenoFocus position performs unexpectedly, Korea Petro 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 Korea Petro will offset losses from the drop in Korea Petro's long position.| GenoFocus vs. Netmarble Games Corp | GenoFocus vs. Koh Young Technology | GenoFocus vs. Hwangkum Steel Technology | GenoFocus vs. Daou Technology |
| Korea Petro vs. LG Chemicals | Korea Petro vs. POSCO Holdings | Korea Petro vs. Hanwha Solutions | Korea Petro vs. Lotte Chemical Corp |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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