Correlation Between Kyung In and RPBio
Can any of the company-specific risk be diversified away by investing in both Kyung In 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 Kyung In and RPBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kyung In Synthetic Corp and RPBio Inc, you can compare the effects of market volatilities on Kyung In 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 Kyung In with a short position of RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kyung In and RPBio.
Diversification Opportunities for Kyung In and RPBio
Weak diversification
The 3 months correlation between Kyung and RPBio is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Kyung In Synthetic Corp and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc and Kyung In 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 Kyung In Synthetic Corp 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 Kyung In i.e., Kyung In and RPBio go up and down completely randomly.
Pair Corralation between Kyung In and RPBio
Assuming the 90 days trading horizon Kyung In Synthetic Corp is expected to generate 1.02 times more return on investment than RPBio. However, Kyung In is 1.02 times more volatile than RPBio Inc. It trades about 0.07 of its potential returns per unit of risk. RPBio Inc is currently generating about -0.39 per unit of risk. If you would invest 278,500 in Kyung In Synthetic Corp on November 7, 2024 and sell it today you would earn a total of 3,500 from holding Kyung In Synthetic Corp or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kyung In Synthetic Corp vs. RPBio Inc
Performance |
| Timeline |
| Kyung In Synthetic |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RPBio Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Kyung In and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kyung In and RPBio
The main advantage of trading using opposite Kyung In and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kyung In 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.The idea behind Kyung In Synthetic Corp and RPBio Inc 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.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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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