Correlation Between Korea Air and RF Materials
Can any of the company-specific risk be diversified away by investing in both Korea Air and RF Materials 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 Korea Air and RF Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Korea Air Svc and RF Materials Co, you can compare the effects of market volatilities on Korea Air and RF Materials 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 Korea Air with a short position of RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Korea Air and RF Materials.
Diversification Opportunities for Korea Air and RF Materials
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Korea and 327260 is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Korea Air Svc and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials and Korea Air 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 Korea Air Svc are associated (or correlated) with RF Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Materials has no effect on the direction of Korea Air i.e., Korea Air and RF Materials go up and down completely randomly.
Pair Corralation between Korea Air and RF Materials
Assuming the 90 days trading horizon Korea Air Svc is expected to under-perform the RF Materials. In addition to that, Korea Air is 1.14 times more volatile than RF Materials Co. It trades about -0.07 of its total potential returns per unit of risk. RF Materials Co is currently generating about 0.18 per unit of volatility. If you would invest 489,500 in RF Materials Co on October 16, 2024 and sell it today you would earn a total of 36,500 from holding RF Materials Co or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Korea Air Svc vs. RF Materials Co
Performance |
| Timeline |
| Korea Air Svc |
| RF Materials |
Korea Air and RF Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Korea Air and RF Materials
The main advantage of trading using opposite Korea Air and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Korea Air position performs unexpectedly, RF Materials 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 RF Materials will offset losses from the drop in RF Materials' long position.| Korea Air vs. Lotte Data Communication | Korea Air vs. Mobileleader CoLtd | Korea Air vs. Digital Power Communications | Korea Air vs. Kisan Telecom Co |
| RF Materials vs. Sempio Foods Co | RF Materials vs. Woori Technology Investment | RF Materials vs. JC Chemical Co | RF Materials vs. Hanil Chemical Ind |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |