Correlation Between Genexine and RPBio
Can any of the company-specific risk be diversified away by investing in both Genexine 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 Genexine and RPBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Genexine and RPBio Inc, you can compare the effects of market volatilities on Genexine 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 Genexine with a short position of RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genexine and RPBio.
Diversification Opportunities for Genexine and RPBio
Poor diversification
The 3 months correlation between Genexine and RPBio is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Genexine and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc and Genexine 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 Genexine 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 Genexine i.e., Genexine and RPBio go up and down completely randomly.
Pair Corralation between Genexine and RPBio
Assuming the 90 days trading horizon Genexine is expected to generate 1.55 times more return on investment than RPBio. However, Genexine is 1.55 times more volatile than RPBio Inc. It trades about -0.01 of its potential returns per unit of risk. RPBio Inc is currently generating about -0.1 per unit of risk. If you would invest 672,000 in Genexine on October 13, 2024 and sell it today you would lose (110,000) from holding Genexine or give up 16.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Genexine vs. RPBio Inc
Performance |
| Timeline |
| Genexine |
| RPBio Inc |
Genexine and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Genexine and RPBio
The main advantage of trading using opposite Genexine and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genexine 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 Genexine 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.| 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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