Correlation Between Bosung Power and RPBio
Can any of the company-specific risk be diversified away by investing in both Bosung Power 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 Bosung Power and RPBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bosung Power Technology and RPBio Inc, you can compare the effects of market volatilities on Bosung Power 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 Bosung Power with a short position of RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosung Power and RPBio.
Diversification Opportunities for Bosung Power and RPBio
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bosung and RPBio is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Bosung Power Technology and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc and Bosung Power 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 Bosung Power Technology 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 Bosung Power i.e., Bosung Power and RPBio go up and down completely randomly.
Pair Corralation between Bosung Power and RPBio
Assuming the 90 days trading horizon Bosung Power Technology is expected to generate 0.92 times more return on investment than RPBio. However, Bosung Power Technology is 1.09 times less risky than RPBio. It trades about 0.21 of its potential returns per unit of risk. RPBio Inc is currently generating about 0.12 per unit of risk. If you would invest 250,000 in Bosung Power Technology on October 13, 2024 and sell it today you would earn a total of 20,000 from holding Bosung Power Technology or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bosung Power Technology vs. RPBio Inc
Performance |
| Timeline |
| Bosung Power Technology |
| RPBio Inc |
Bosung Power and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bosung Power and RPBio
The main advantage of trading using opposite Bosung Power and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosung Power 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.| Bosung Power vs. Iljin Display | Bosung Power vs. Lotte Data Communication | Bosung Power vs. Nice Information Telecommunication | Bosung Power vs. SCI Information Service |
| RPBio vs. Dongbang Transport Logistics | RPBio vs. Ssangyong Information Communication | RPBio vs. Nable Communications | RPBio vs. Daishin Information Communications |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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