Correlation Between Ray and Access Bio
Can any of the company-specific risk be diversified away by investing in both Ray and Access Bio 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 Ray and Access Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ray Co and Access Bio, you can compare the effects of market volatilities on Ray and Access Bio 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 Ray with a short position of Access Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ray and Access Bio.
Diversification Opportunities for Ray and Access Bio
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ray and Access is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Ray Co and Access Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Bio and Ray 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 Ray Co are associated (or correlated) with Access Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Bio has no effect on the direction of Ray i.e., Ray and Access Bio go up and down completely randomly.
Pair Corralation between Ray and Access Bio
Assuming the 90 days trading horizon Ray Co is expected to under-perform the Access Bio. In addition to that, Ray is 1.21 times more volatile than Access Bio. It trades about -0.45 of its total potential returns per unit of risk. Access Bio is currently generating about -0.14 per unit of volatility. If you would invest 608,000 in Access Bio on September 1, 2024 and sell it today you would lose (54,000) from holding Access Bio or give up 8.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ray Co vs. Access Bio
Performance |
| Timeline |
| Ray Co |
| Access Bio |
Ray and Access Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ray and Access Bio
The main advantage of trading using opposite Ray and Access Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ray position performs unexpectedly, Access Bio 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 Access Bio will offset losses from the drop in Access Bio's long position.| Ray vs. Korean Air Lines | Ray vs. Koryo Credit Information | Ray vs. Dongbu Insurance Co | Ray vs. Total Soft Bank |
| Access Bio vs. Iljin Display | Access Bio vs. Display Tech Co | Access Bio vs. Polaris Office Corp | Access Bio vs. Kaonmedia 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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