Correlation Between Handok Clean and Genie Music
Can any of the company-specific risk be diversified away by investing in both Handok Clean 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 Handok Clean and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Handok Clean Tech and Genie Music, you can compare the effects of market volatilities on Handok Clean 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 Handok Clean with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Handok Clean and Genie Music.
Diversification Opportunities for Handok Clean and Genie Music
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Handok and Genie is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Handok Clean Tech and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Handok Clean 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 Handok Clean Tech 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 Handok Clean i.e., Handok Clean and Genie Music go up and down completely randomly.
Pair Corralation between Handok Clean and Genie Music
Assuming the 90 days trading horizon Handok Clean Tech is expected to generate 0.28 times more return on investment than Genie Music. However, Handok Clean Tech is 3.57 times less risky than Genie Music. It trades about -0.36 of its potential returns per unit of risk. Genie Music is currently generating about -0.1 per unit of risk. If you would invest 675,000 in Handok Clean Tech on August 31, 2024 and sell it today you would lose (38,000) from holding Handok Clean Tech or give up 5.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Handok Clean Tech vs. Genie Music
Performance |
| Timeline |
| Handok Clean Tech |
| Genie Music |
Handok Clean and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Handok Clean and Genie Music
The main advantage of trading using opposite Handok Clean and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Handok Clean 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.| Handok Clean vs. Busan Industrial Co | Handok Clean vs. Busan Ind | Handok Clean vs. Mirae Asset Daewoo | Handok Clean vs. Finebesteel |
| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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