Correlation Between RPBio and Jin Air
Can any of the company-specific risk be diversified away by investing in both RPBio and Jin Air 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 Jin Air into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPBio Inc and Jin Air Co, you can compare the effects of market volatilities on RPBio and Jin Air 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 Jin Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPBio and Jin Air.
Diversification Opportunities for RPBio and Jin Air
Very weak diversification
The 3 months correlation between RPBio and Jin is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding RPBio Inc and Jin Air Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jin Air 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 Jin Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jin Air has no effect on the direction of RPBio i.e., RPBio and Jin Air go up and down completely randomly.
Pair Corralation between RPBio and Jin Air
Assuming the 90 days trading horizon RPBio Inc is expected to under-perform the Jin Air. In addition to that, RPBio is 1.13 times more volatile than Jin Air Co. It trades about -0.07 of its total potential returns per unit of risk. Jin Air Co is currently generating about -0.04 per unit of volatility. If you would invest 1,674,000 in Jin Air Co on November 9, 2024 and sell it today you would lose (698,000) from holding Jin Air Co or give up 41.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RPBio Inc vs. Jin Air Co
Performance |
| Timeline |
| RPBio Inc |
| Jin Air |
RPBio and Jin Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPBio and Jin Air
The main advantage of trading using opposite RPBio and Jin Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPBio position performs unexpectedly, Jin Air 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 Jin Air will offset losses from the drop in Jin Air's long position.| RPBio vs. Aprogen Healthcare Games | RPBio vs. Sung Bo Chemicals | RPBio vs. Chorokbaem Healthcare Co | RPBio vs. Seoul Electronics Telecom |
| Jin Air vs. SM Entertainment Co | Jin Air vs. SKONEC Entertainment Co | Jin Air vs. Jeju Beer Co | Jin Air vs. Worldex Industry Trading |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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