Correlation Between Samsung KODEX and RPBio
Can any of the company-specific risk be diversified away by investing in both Samsung KODEX 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 Samsung KODEX and RPBio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samsung KODEX IT and RPBio Inc, you can compare the effects of market volatilities on Samsung KODEX 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 Samsung KODEX with a short position of RPBio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samsung KODEX and RPBio.
Diversification Opportunities for Samsung KODEX and RPBio
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Samsung and RPBio is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Samsung KODEX IT and RPBio Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RPBio Inc and Samsung KODEX 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 Samsung KODEX IT 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 Samsung KODEX i.e., Samsung KODEX and RPBio go up and down completely randomly.
Pair Corralation between Samsung KODEX and RPBio
Assuming the 90 days trading horizon Samsung KODEX IT is expected to generate 0.67 times more return on investment than RPBio. However, Samsung KODEX IT is 1.48 times less risky than RPBio. It trades about -0.1 of its potential returns per unit of risk. RPBio Inc is currently generating about -0.07 per unit of risk. If you would invest 1,546,500 in Samsung KODEX IT on September 25, 2024 and sell it today you would lose (61,500) from holding Samsung KODEX IT or give up 3.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samsung KODEX IT vs. RPBio Inc
Performance |
| Timeline |
| Samsung KODEX IT |
| RPBio Inc |
Samsung KODEX and RPBio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samsung KODEX and RPBio
The main advantage of trading using opposite Samsung KODEX and RPBio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsung KODEX 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.| Samsung KODEX vs. 456680 | Samsung KODEX vs. Busan Industrial Co | Samsung KODEX vs. Busan Ind | Samsung KODEX vs. Mirae Asset Daewoo |
| RPBio vs. Samsung Electronics Co | RPBio vs. Samsung Electronics Co | RPBio vs. LG Energy Solution | RPBio vs. SK Hynix |
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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