Correlation Between Green Cross and ISU Abxis
Can any of the company-specific risk be diversified away by investing in both Green Cross and ISU Abxis 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 Green Cross and ISU Abxis into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Cross Lab and ISU Abxis Co, you can compare the effects of market volatilities on Green Cross and ISU Abxis 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 Green Cross with a short position of ISU Abxis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Cross and ISU Abxis.
Diversification Opportunities for Green Cross and ISU Abxis
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Green and ISU is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Green Cross Lab and ISU Abxis Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ISU Abxis and Green Cross 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 Green Cross Lab are associated (or correlated) with ISU Abxis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ISU Abxis has no effect on the direction of Green Cross i.e., Green Cross and ISU Abxis go up and down completely randomly.
Pair Corralation between Green Cross and ISU Abxis
Assuming the 90 days trading horizon Green Cross Lab is expected to under-perform the ISU Abxis. In addition to that, Green Cross is 1.0 times more volatile than ISU Abxis Co. It trades about -0.09 of its total potential returns per unit of risk. ISU Abxis Co is currently generating about -0.03 per unit of volatility. If you would invest 620,000 in ISU Abxis Co on August 25, 2024 and sell it today you would lose (122,000) from holding ISU Abxis Co or give up 19.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Cross Lab vs. ISU Abxis Co
Performance |
| Timeline |
| Green Cross Lab |
| ISU Abxis |
Green Cross and ISU Abxis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Cross and ISU Abxis
The main advantage of trading using opposite Green Cross and ISU Abxis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Cross position performs unexpectedly, ISU Abxis 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 ISU Abxis will offset losses from the drop in ISU Abxis' long position.| Green Cross vs. Samsung Biologics Co | Green Cross vs. SK Bioscience Co | Green Cross vs. Sk Biopharmaceuticals Co | Green Cross vs. ABL Bio |
| ISU Abxis vs. Samsung Biologics Co | ISU Abxis vs. SK Bioscience Co | ISU Abxis vs. Sk Biopharmaceuticals Co | ISU Abxis vs. ABL Bio |
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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