Correlation Between ABL Bio and Guyoung Technology
Can any of the company-specific risk be diversified away by investing in both ABL Bio and Guyoung Technology 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 ABL Bio and Guyoung Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ABL Bio and Guyoung Technology Co, you can compare the effects of market volatilities on ABL Bio and Guyoung Technology 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 ABL Bio with a short position of Guyoung Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABL Bio and Guyoung Technology.
Diversification Opportunities for ABL Bio and Guyoung Technology
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ABL and Guyoung is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding ABL Bio and Guyoung Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guyoung Technology and ABL Bio 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 ABL Bio are associated (or correlated) with Guyoung Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guyoung Technology has no effect on the direction of ABL Bio i.e., ABL Bio and Guyoung Technology go up and down completely randomly.
Pair Corralation between ABL Bio and Guyoung Technology
Assuming the 90 days trading horizon ABL Bio is expected to generate 1.65 times more return on investment than Guyoung Technology. However, ABL Bio is 1.65 times more volatile than Guyoung Technology Co. It trades about 0.18 of its potential returns per unit of risk. Guyoung Technology Co is currently generating about 0.16 per unit of risk. If you would invest 2,720,000 in ABL Bio on October 30, 2024 and sell it today you would earn a total of 810,000 from holding ABL Bio or generate 29.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABL Bio vs. Guyoung Technology Co
Performance |
| Timeline |
| ABL Bio |
| Guyoung Technology |
ABL Bio and Guyoung Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABL Bio and Guyoung Technology
The main advantage of trading using opposite ABL Bio and Guyoung Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABL Bio position performs unexpectedly, Guyoung Technology 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 Guyoung Technology will offset losses from the drop in Guyoung Technology's long position.The idea behind ABL Bio and Guyoung Technology Co 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.| Guyoung Technology vs. GS Retail Co | Guyoung Technology vs. Samlip General Foods | Guyoung Technology vs. Sam Yang Foods | Guyoung Technology vs. Polaris Office Corp |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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