Correlation Between DRGEM and Access Bio
Can any of the company-specific risk be diversified away by investing in both DRGEM and Access Bio 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 DRGEM and Access Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRGEM and Access Bio, you can compare the effects of market volatilities on DRGEM and Access Bio 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 DRGEM with a short position of Access Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRGEM and Access Bio.
Diversification Opportunities for DRGEM and Access Bio
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between DRGEM and Access is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding DRGEM and Access Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Access Bio and DRGEM 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 DRGEM are associated (or correlated) with Access Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Access Bio has no effect on the direction of DRGEM i.e., DRGEM and Access Bio go up and down completely randomly.
Pair Corralation between DRGEM and Access Bio
Assuming the 90 days trading horizon DRGEM is expected to generate 0.55 times more return on investment than Access Bio. However, DRGEM is 1.83 times less risky than Access Bio. It trades about -0.09 of its potential returns per unit of risk. Access Bio is currently generating about -0.19 per unit of risk. If you would invest 1,020,000 in DRGEM on February 4, 2024 and sell it today you would lose (20,000) from holding DRGEM or give up 1.96% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
DRGEM vs. Access Bio
Performance |
Timeline |
DRGEM |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Access Bio |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DRGEM and Access Bio Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DRGEM and Access Bio
The main advantage of trading using opposite DRGEM and Access Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRGEM position performs unexpectedly, Access Bio 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 Access Bio will offset losses from the drop in Access Bio's long position.DRGEM vs. LEENO Industrial | DRGEM vs. Leaders Technology Investment | DRGEM vs. Eugene Investment Securities | DRGEM vs. Ssangyong Cement Industrial |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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