Correlation Between RPBio and Samsung KODEX
Can any of the company-specific risk be diversified away by investing in both RPBio and Samsung KODEX 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 Samsung KODEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPBio Inc and Samsung KODEX IT, you can compare the effects of market volatilities on RPBio and Samsung KODEX 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 Samsung KODEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPBio and Samsung KODEX.
Diversification Opportunities for RPBio and Samsung KODEX
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RPBio and Samsung is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding RPBio Inc and Samsung KODEX IT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung KODEX IT 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 Samsung KODEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung KODEX IT has no effect on the direction of RPBio i.e., RPBio and Samsung KODEX go up and down completely randomly.
Pair Corralation between RPBio and Samsung KODEX
Assuming the 90 days trading horizon RPBio Inc is expected to under-perform the Samsung KODEX. In addition to that, RPBio is 1.48 times more volatile than Samsung KODEX IT. It trades about -0.07 of its total potential returns per unit of risk. Samsung KODEX IT is currently generating about -0.1 per unit of volatility. 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 |
RPBio Inc vs. Samsung KODEX IT
Performance |
| Timeline |
| RPBio Inc |
| Samsung KODEX IT |
RPBio and Samsung KODEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPBio and Samsung KODEX
The main advantage of trading using opposite RPBio and Samsung KODEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPBio position performs unexpectedly, Samsung KODEX 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 Samsung KODEX will offset losses from the drop in Samsung KODEX's long position.| RPBio vs. Samsung Electronics Co | RPBio vs. Samsung Electronics Co | RPBio vs. LG Energy Solution | RPBio vs. SK Hynix |
| Samsung KODEX vs. 456680 | Samsung KODEX vs. Busan Industrial Co | Samsung KODEX vs. Busan Ind | Samsung KODEX vs. Mirae Asset Daewoo |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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