Correlation Between RPBio and Myoung Shin

Can any of the company-specific risk be diversified away by investing in both RPBio and Myoung Shin 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 Myoung Shin into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between RPBio Inc and Myoung Shin Industrial, you can compare the effects of market volatilities on RPBio and Myoung Shin 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 Myoung Shin. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPBio and Myoung Shin.

Diversification Opportunities for RPBio and Myoung Shin

0.13

Correlation Coefficient

RPBio  Myoung Shin

Average diversification

The 3 months correlation between RPBio and Myoung is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding RPBio Inc and Myoung Shin Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Myoung Shin Industrial 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 Myoung Shin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Myoung Shin Industrial has no effect on the direction of RPBio i.e., RPBio and Myoung Shin go up and down completely randomly.

Pair Corralation between RPBio and Myoung Shin

Assuming the 90 days trading horizon RPBio Inc is expected to generate 0.81 times more return on investment than Myoung Shin. However, RPBio Inc is 1.24 times less risky than Myoung Shin. It trades about 0.01 of its potential returns per unit of risk. Myoung Shin Industrial is currently generating about -0.11 per unit of risk. If you would invest  530,000  in RPBio Inc on December 2, 2024 and sell it today you would lose (2,000) from holding RPBio Inc or give up 0.38% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

RPBio Inc  vs.  Myoung Shin Industrial

RPBio Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days RPBio Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, RPBio is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Myoung Shin Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days Myoung Shin Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with RPBio and Myoung Shin

The main advantage of trading using opposite RPBio and Myoung Shin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPBio position performs unexpectedly, Myoung Shin 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 Myoung Shin will offset losses from the drop in Myoung Shin's long position.

The idea behind RPBio Inc and Myoung Shin Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.