Correlation Between Pureun Mutual and Genie Music

Can any of the company-specific risk be diversified away by investing in both Pureun Mutual 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 Pureun Mutual and Genie Music into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pureun Mutual Savings and Genie Music, you can compare the effects of market volatilities on Pureun Mutual 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 Pureun Mutual with a short position of Genie Music. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pureun Mutual and Genie Music.

Diversification Opportunities for Pureun Mutual and Genie Music

0.07

Correlation Coefficient

Pureun Mutual  Genie Music

Significant diversification

The 3 months correlation between Pureun and Genie is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Pureun Mutual Savings and Genie Music in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genie Music and Pureun Mutual 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 Pureun Mutual Savings 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 Pureun Mutual i.e., Pureun Mutual and Genie Music go up and down completely randomly.

Pair Corralation between Pureun Mutual and Genie Music

Assuming the 90 days trading horizon Pureun Mutual is expected to generate 1.74 times less return on investment than Genie Music. In addition to that, Pureun Mutual is 1.21 times more volatile than Genie Music. It trades about 0.15 of its total potential returns per unit of risk. Genie Music is currently generating about 0.32 per unit of volatility. If you would invest  180,000  in Genie Music on October 8, 2024 and sell it today you would earn a total of  35,500  from holding Genie Music or generate 19.72% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Pureun Mutual Savings  vs.  Genie Music

Pureun Mutual Savings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pureun Mutual Savings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Pureun Mutual is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Genie Music

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genie Music has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Pureun Mutual and Genie Music

The main advantage of trading using opposite Pureun Mutual and Genie Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pureun Mutual 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.

The idea behind Pureun Mutual Savings and Genie Music pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.