Correlation Between Top Material and Genie Music
Can any of the company-specific risk be diversified away by investing in both Top Material 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 Top Material and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Material Co and Genie Music, you can compare the effects of market volatilities on Top Material 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 Top Material with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Material and Genie Music.
Diversification Opportunities for Top Material and Genie Music
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Top and Genie is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Top Material Co and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Top Material 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 Top Material Co 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 Top Material i.e., Top Material and Genie Music go up and down completely randomly.
Pair Corralation between Top Material and Genie Music
Assuming the 90 days trading horizon Top Material Co is expected to generate 1.82 times more return on investment than Genie Music. However, Top Material is 1.82 times more volatile than Genie Music. It trades about 0.11 of its potential returns per unit of risk. Genie Music is currently generating about -0.08 per unit of risk. If you would invest 2,600,000 in Top Material Co on October 28, 2024 and sell it today you would earn a total of 160,000 from holding Top Material Co or generate 6.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Top Material Co vs. Genie Music
Performance |
| Timeline |
| Top Material |
| Genie Music |
Top Material and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Material and Genie Music
The main advantage of trading using opposite Top Material and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Material 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.| Top Material vs. Heungkuk Metaltech CoLtd | Top Material vs. Choil Aluminum | Top Material vs. Kbi Metal Co | Top Material vs. CU Medical Systems |
| Genie Music vs. Busan Industrial Co | Genie Music vs. Busan Ind | Genie Music vs. RPBio Inc | Genie Music vs. Finebesteel |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |