Correlation Between RPBio and Shinsegae Food
Can any of the company-specific risk be diversified away by investing in both RPBio and Shinsegae Food 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 RPBio and Shinsegae Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPBio Inc and Shinsegae Food, you can compare the effects of market volatilities on RPBio and Shinsegae Food 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 RPBio with a short position of Shinsegae Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPBio and Shinsegae Food.
Diversification Opportunities for RPBio and Shinsegae Food
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RPBio and Shinsegae is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding RPBio Inc and Shinsegae Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shinsegae Food and RPBio 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 RPBio Inc are associated (or correlated) with Shinsegae Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shinsegae Food has no effect on the direction of RPBio i.e., RPBio and Shinsegae Food go up and down completely randomly.
Pair Corralation between RPBio and Shinsegae Food
Assuming the 90 days trading horizon RPBio Inc is expected to under-perform the Shinsegae Food. In addition to that, RPBio is 1.92 times more volatile than Shinsegae Food. It trades about -0.21 of its total potential returns per unit of risk. Shinsegae Food is currently generating about -0.34 per unit of volatility. If you would invest 3,470,000 in Shinsegae Food on September 4, 2024 and sell it today you would lose (375,000) from holding Shinsegae Food or give up 10.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RPBio Inc vs. Shinsegae Food
Performance |
| Timeline |
| RPBio Inc |
| Shinsegae Food |
RPBio and Shinsegae Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPBio and Shinsegae Food
The main advantage of trading using opposite RPBio and Shinsegae Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPBio position performs unexpectedly, Shinsegae Food 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 Shinsegae Food will offset losses from the drop in Shinsegae Food's long position.| RPBio vs. Samsung Electronics Co | RPBio vs. Samsung Electronics Co | RPBio vs. LG Energy Solution | RPBio vs. SK Hynix |
| Shinsegae Food vs. Korea Real Estate | Shinsegae Food vs. Busan Industrial Co | Shinsegae Food vs. UNISEM Co | Shinsegae Food vs. RPBio Inc |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |