Correlation Between Genius Electronic and Merry Electronics
Can any of the company-specific risk be diversified away by investing in both Genius Electronic and Merry Electronics 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 Genius Electronic and Merry Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genius Electronic Optical and Merry Electronics Co, you can compare the effects of market volatilities on Genius Electronic and Merry Electronics 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 Genius Electronic with a short position of Merry Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genius Electronic and Merry Electronics.
Diversification Opportunities for Genius Electronic and Merry Electronics
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Genius and Merry is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Genius Electronic Optical and Merry Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Merry Electronics and Genius Electronic 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 Genius Electronic Optical are associated (or correlated) with Merry Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Merry Electronics has no effect on the direction of Genius Electronic i.e., Genius Electronic and Merry Electronics go up and down completely randomly.
Pair Corralation between Genius Electronic and Merry Electronics
Assuming the 90 days trading horizon Genius Electronic Optical is expected to generate 0.92 times more return on investment than Merry Electronics. However, Genius Electronic Optical is 1.09 times less risky than Merry Electronics. It trades about 0.01 of its potential returns per unit of risk. Merry Electronics Co is currently generating about 0.0 per unit of risk. If you would invest 44,550 in Genius Electronic Optical on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Genius Electronic Optical or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genius Electronic Optical vs. Merry Electronics Co
Performance |
| Timeline |
| Genius Electronic Optical |
| Merry Electronics |
Genius Electronic and Merry Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genius Electronic and Merry Electronics
The main advantage of trading using opposite Genius Electronic and Merry Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genius Electronic position performs unexpectedly, Merry Electronics 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 Merry Electronics will offset losses from the drop in Merry Electronics' long position.| Genius Electronic vs. LARGAN Precision Co | Genius Electronic vs. Catcher Technology Co | Genius Electronic vs. Unimicron Technology Corp | Genius Electronic vs. WIN Semiconductors |
| Merry Electronics vs. Asia Metal Industries | Merry Electronics vs. Chunghwa Telecom Co | Merry Electronics vs. Oceanic Beverages Co | Merry Electronics vs. Chief Telecom |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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