Correlation Between LS Materials and Genie Music
Can any of the company-specific risk be diversified away by investing in both LS Materials 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 LS Materials and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LS Materials and Genie Music, you can compare the effects of market volatilities on LS Materials 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 LS Materials with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of LS Materials and Genie Music.
Diversification Opportunities for LS Materials and Genie Music
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 417200 and Genie is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding LS Materials and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and LS Materials 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 LS Materials 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 LS Materials i.e., LS Materials and Genie Music go up and down completely randomly.
Pair Corralation between LS Materials and Genie Music
Assuming the 90 days trading horizon LS Materials is expected to generate 2.84 times more return on investment than Genie Music. However, LS Materials is 2.84 times more volatile than Genie Music. It trades about 0.1 of its potential returns per unit of risk. Genie Music is currently generating about -0.05 per unit of risk. If you would invest 1,203,000 in LS Materials on November 9, 2024 and sell it today you would earn a total of 92,000 from holding LS Materials or generate 7.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LS Materials vs. Genie Music
Performance |
| Timeline |
| LS Materials |
| Genie Music |
LS Materials and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LS Materials and Genie Music
The main advantage of trading using opposite LS Materials and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LS Materials 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.| LS Materials vs. Samsung Electronics Co | LS Materials vs. Samsung Electronics Co | LS Materials vs. LG Energy Solution | LS Materials vs. SK Hynix |
| Genie Music vs. Finebesteel | Genie Music vs. Nature and Environment | Genie Music vs. Sung Bo Chemicals | Genie Music vs. LG Chemicals |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |