Correlation Between Sungdo Engineering and RFTech
Can any of the company-specific risk be diversified away by investing in both Sungdo Engineering 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 Sungdo Engineering and RFTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungdo Engineering Construction and RFTech Co, you can compare the effects of market volatilities on Sungdo Engineering 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 Sungdo Engineering with a short position of RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungdo Engineering and RFTech.
Diversification Opportunities for Sungdo Engineering and RFTech
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sungdo and RFTech is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Sungdo Engineering Constructio and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and Sungdo Engineering 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 Sungdo Engineering Construction 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 Sungdo Engineering i.e., Sungdo Engineering and RFTech go up and down completely randomly.
Pair Corralation between Sungdo Engineering and RFTech
Assuming the 90 days trading horizon Sungdo Engineering Construction is expected to under-perform the RFTech. In addition to that, Sungdo Engineering is 1.08 times more volatile than RFTech Co. It trades about -0.64 of its total potential returns per unit of risk. RFTech Co is currently generating about -0.08 per unit of volatility. If you would invest 383,500 in RFTech Co on November 5, 2024 and sell it today you would lose (9,000) from holding RFTech Co or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungdo Engineering Constructio vs. RFTech Co
Performance |
| Timeline |
| Sungdo Engineering |
| RFTech |
Sungdo Engineering and RFTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungdo Engineering and RFTech
The main advantage of trading using opposite Sungdo Engineering and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungdo Engineering 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.| Sungdo Engineering vs. Samsung Card Co | Sungdo Engineering vs. EBEST Investment Securities | Sungdo Engineering vs. Koh Young Technology | Sungdo Engineering vs. Hansol Chemica |
| RFTech vs. Samsung Card Co | RFTech vs. EBEST Investment Securities | RFTech vs. Koh Young Technology | RFTech vs. Hansol Chemica |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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