Correlation Between RPBio and GemVaxKAEL CoLtd

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

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

Diversification Opportunities for RPBio and GemVaxKAEL CoLtd

0.31

Correlation Coefficient

RPBio  GemVaxKAEL CoLtd

Weak diversification

The 3 months correlation between RPBio and GemVaxKAEL is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding RPBio Inc and GemVaxKAEL CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GemVaxKAEL CoLtd 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 GemVaxKAEL CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GemVaxKAEL CoLtd has no effect on the direction of RPBio i.e., RPBio and GemVaxKAEL CoLtd go up and down completely randomly.

Pair Corralation between RPBio and GemVaxKAEL CoLtd

Assuming the 90 days trading horizon RPBio Inc is expected to under-perform the GemVaxKAEL CoLtd. But the stock apears to be less risky and, when comparing its historical volatility, RPBio Inc is 2.75 times less risky than GemVaxKAEL CoLtd. The stock trades about -0.08 of its potential returns per unit of risk. The GemVaxKAEL CoLtd is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  1,898,000  in GemVaxKAEL CoLtd on October 24, 2024 and sell it today you would lose (13,000) from holding GemVaxKAEL CoLtd or give up 0.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

RPBio Inc  vs.  GemVaxKAEL CoLtd

RPBio Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RPBio Inc 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

GemVaxKAEL CoLtd

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GemVaxKAEL CoLtd are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, GemVaxKAEL CoLtd sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RPBio and GemVaxKAEL CoLtd

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

The idea behind RPBio Inc and GemVaxKAEL CoLtd 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 CEOs Directory module to screen CEOs from public companies around the world.