Correlation Between SeAH Besteel and RFTech
Can any of the company-specific risk be diversified away by investing in both SeAH Besteel and RFTech 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 SeAH Besteel and RFTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SeAH Besteel Corp and RFTech Co, you can compare the effects of market volatilities on SeAH Besteel and RFTech 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 SeAH Besteel with a short position of RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of SeAH Besteel and RFTech.
Diversification Opportunities for SeAH Besteel and RFTech
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SeAH and RFTech is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding SeAH Besteel Corp and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and SeAH Besteel 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 SeAH Besteel Corp are associated (or correlated) with RFTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFTech has no effect on the direction of SeAH Besteel i.e., SeAH Besteel and RFTech go up and down completely randomly.
Pair Corralation between SeAH Besteel and RFTech
Assuming the 90 days trading horizon SeAH Besteel Corp is expected to generate 0.76 times more return on investment than RFTech. However, SeAH Besteel Corp is 1.31 times less risky than RFTech. It trades about -0.01 of its potential returns per unit of risk. RFTech Co is currently generating about -0.1 per unit of risk. If you would invest 1,985,000 in SeAH Besteel Corp on October 28, 2024 and sell it today you would lose (11,000) from holding SeAH Besteel Corp or give up 0.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SeAH Besteel Corp vs. RFTech Co
Performance |
| Timeline |
| SeAH Besteel Corp |
| RFTech |
SeAH Besteel and RFTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SeAH Besteel and RFTech
The main advantage of trading using opposite SeAH Besteel and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SeAH Besteel position performs unexpectedly, RFTech 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 RFTech will offset losses from the drop in RFTech's long position.| SeAH Besteel vs. Organic Special Pet | SeAH Besteel vs. CJ Seafood Corp | SeAH Besteel vs. Ssangyong Information Communication | SeAH Besteel vs. SK Telecom Co |
| RFTech vs. Hyosung Advanced Materials | RFTech vs. Daejoo Electronic Materials | RFTech vs. Hana Materials | RFTech vs. Top Material Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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