Correlation Between Raontech and Genie Music
Can any of the company-specific risk be diversified away by investing in both Raontech 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 Raontech and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Raontech and Genie Music, you can compare the effects of market volatilities on Raontech 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 Raontech with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raontech and Genie Music.
Diversification Opportunities for Raontech and Genie Music
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Raontech and Genie is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Raontech and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Raontech 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 Raontech 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 Raontech i.e., Raontech and Genie Music go up and down completely randomly.
Pair Corralation between Raontech and Genie Music
Assuming the 90 days trading horizon Raontech is expected to under-perform the Genie Music. In addition to that, Raontech is 1.48 times more volatile than Genie Music. It trades about -0.54 of its total potential returns per unit of risk. Genie Music is currently generating about -0.15 per unit of volatility. If you would invest 218,000 in Genie Music on November 7, 2024 and sell it today you would lose (12,500) from holding Genie Music or give up 5.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Raontech vs. Genie Music
Performance |
| Timeline |
| Raontech |
| Genie Music |
Raontech and Genie Music Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Raontech and Genie Music
The main advantage of trading using opposite Raontech and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raontech 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.| Raontech vs. TK Chemical | Raontech vs. ISU Chemical Co | Raontech vs. SH Energy Chemical | Raontech vs. Nasmedia 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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