Correlation Between RPBio and Sungchang Autotech
Can any of the company-specific risk be diversified away by investing in both RPBio and Sungchang Autotech 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 Sungchang Autotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPBio Inc and Sungchang Autotech Co, you can compare the effects of market volatilities on RPBio and Sungchang Autotech 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 Sungchang Autotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPBio and Sungchang Autotech.
Diversification Opportunities for RPBio and Sungchang Autotech
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RPBio and Sungchang is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding RPBio Inc and Sungchang Autotech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sungchang Autotech 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 Sungchang Autotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sungchang Autotech has no effect on the direction of RPBio i.e., RPBio and Sungchang Autotech go up and down completely randomly.
Pair Corralation between RPBio and Sungchang Autotech
Assuming the 90 days trading horizon RPBio Inc is expected to under-perform the Sungchang Autotech. In addition to that, RPBio is 1.0 times more volatile than Sungchang Autotech Co. It trades about -0.13 of its total potential returns per unit of risk. Sungchang Autotech Co is currently generating about -0.06 per unit of volatility. If you would invest 426,000 in Sungchang Autotech Co on September 3, 2024 and sell it today you would lose (41,500) from holding Sungchang Autotech Co or give up 9.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RPBio Inc vs. Sungchang Autotech Co
Performance |
| Timeline |
| RPBio Inc |
| Sungchang Autotech |
RPBio and Sungchang Autotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPBio and Sungchang Autotech
The main advantage of trading using opposite RPBio and Sungchang Autotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPBio position performs unexpectedly, Sungchang Autotech 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 Sungchang Autotech will offset losses from the drop in Sungchang Autotech's long position.| RPBio vs. PJ Metal Co | RPBio vs. Wave Electronics Co | RPBio vs. Youngsin Metal Industrial | RPBio vs. Daeduck Electronics Co |
| Sungchang Autotech vs. Korea Real Estate | Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. UNISEM Co | Sungchang Autotech 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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