Correlation Between Access Bio and Daewoo Shipbuilding
Can any of the company-specific risk be diversified away by investing in both Access Bio and Daewoo Shipbuilding 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 Access Bio and Daewoo Shipbuilding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Access Bio and Daewoo Shipbuilding, you can compare the effects of market volatilities on Access Bio and Daewoo Shipbuilding 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 Access Bio with a short position of Daewoo Shipbuilding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Access Bio and Daewoo Shipbuilding.
Diversification Opportunities for Access Bio and Daewoo Shipbuilding
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Access and Daewoo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Access Bio and Daewoo Shipbuilding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Daewoo Shipbuilding and Access 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 Access Bio are associated (or correlated) with Daewoo Shipbuilding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Daewoo Shipbuilding has no effect on the direction of Access Bio i.e., Access Bio and Daewoo Shipbuilding go up and down completely randomly.
Pair Corralation between Access Bio and Daewoo Shipbuilding
Assuming the 90 days trading horizon Access Bio is expected to generate 0.68 times more return on investment than Daewoo Shipbuilding. However, Access Bio is 1.46 times less risky than Daewoo Shipbuilding. It trades about 0.0 of its potential returns per unit of risk. Daewoo Shipbuilding is currently generating about -0.07 per unit of risk. If you would invest 559,000 in Access Bio on September 13, 2024 and sell it today you would lose (6,000) from holding Access Bio or give up 1.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Access Bio vs. Daewoo Shipbuilding
Performance |
| Timeline |
| Access Bio |
| Daewoo Shipbuilding |
Access Bio and Daewoo Shipbuilding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Access Bio and Daewoo Shipbuilding
The main advantage of trading using opposite Access Bio and Daewoo Shipbuilding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Access Bio position performs unexpectedly, Daewoo Shipbuilding 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 Daewoo Shipbuilding will offset losses from the drop in Daewoo Shipbuilding's long position.| Access Bio vs. CJ Seafood Corp | Access Bio vs. FoodNamoo | Access Bio vs. Seoul Food Industrial | Access Bio vs. Foodnamoo |
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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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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