Correlation Between Daewoo SBI and Genie Music
Can any of the company-specific risk be diversified away by investing in both Daewoo SBI 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 Daewoo SBI and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daewoo SBI SPAC and Genie Music, you can compare the effects of market volatilities on Daewoo SBI 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 Daewoo SBI with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daewoo SBI and Genie Music.
Diversification Opportunities for Daewoo SBI and Genie Music
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Daewoo and Genie is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Daewoo SBI SPAC and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Daewoo SBI 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 Daewoo SBI SPAC 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 Daewoo SBI i.e., Daewoo SBI and Genie Music go up and down completely randomly.
Pair Corralation between Daewoo SBI and Genie Music
Assuming the 90 days trading horizon Daewoo SBI SPAC is expected to under-perform the Genie Music. But the stock apears to be less risky and, when comparing its historical volatility, Daewoo SBI SPAC is 1.32 times less risky than Genie Music. The stock trades about -0.09 of its potential returns per unit of risk. The Genie Music is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 403,000 in Genie Music on September 1, 2024 and sell it today you would lose (186,500) from holding Genie Music or give up 46.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daewoo SBI SPAC vs. Genie Music
Performance |
| Timeline |
| Daewoo SBI SPAC |
| Genie Music |
Daewoo SBI and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daewoo SBI and Genie Music
The main advantage of trading using opposite Daewoo SBI and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daewoo SBI 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.| Daewoo SBI vs. Choil Aluminum | Daewoo SBI vs. Cube Entertainment | Daewoo SBI vs. Kbi Metal Co | Daewoo SBI vs. Asiana Airlines |
| Genie Music vs. AfreecaTV Co | Genie Music vs. Seegene | Genie Music vs. SS TECH | Genie Music vs. Busan Industrial 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |