Correlation Between Mirae Asset and RPBio
Can any of the company-specific risk be diversified away by investing in both Mirae Asset and RPBio 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 Mirae Asset and RPBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mirae Asset Daewoo and RPBio Inc, you can compare the effects of market volatilities on Mirae Asset and RPBio 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 Mirae Asset with a short position of RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mirae Asset and RPBio.
Diversification Opportunities for Mirae Asset and RPBio
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Mirae and RPBio is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Mirae Asset Daewoo and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc and Mirae Asset 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 Mirae Asset Daewoo are associated (or correlated) with RPBio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RPBio Inc has no effect on the direction of Mirae Asset i.e., Mirae Asset and RPBio go up and down completely randomly.
Pair Corralation between Mirae Asset and RPBio
Assuming the 90 days trading horizon Mirae Asset Daewoo is expected to generate 0.56 times more return on investment than RPBio. However, Mirae Asset Daewoo is 1.79 times less risky than RPBio. It trades about 0.0 of its potential returns per unit of risk. RPBio Inc is currently generating about -0.17 per unit of risk. If you would invest 403,500 in Mirae Asset Daewoo on September 1, 2024 and sell it today you would lose (1,500) from holding Mirae Asset Daewoo or give up 0.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mirae Asset Daewoo vs. RPBio Inc
Performance |
| Timeline |
| Mirae Asset Daewoo |
| RPBio Inc |
Mirae Asset and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mirae Asset and RPBio
The main advantage of trading using opposite Mirae Asset and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mirae Asset position performs unexpectedly, RPBio 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 RPBio will offset losses from the drop in RPBio's long position.| Mirae Asset vs. LG Display Co | Mirae Asset vs. Hansol Homedeco Co | Mirae Asset vs. BGF Retail Co | Mirae Asset vs. Display Tech 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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