Correlation Between Ecoplastic and RFTech
Can any of the company-specific risk be diversified away by investing in both Ecoplastic 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 Ecoplastic and RFTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecoplastic and RFTech Co, you can compare the effects of market volatilities on Ecoplastic 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 Ecoplastic with a short position of RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecoplastic and RFTech.
Diversification Opportunities for Ecoplastic and RFTech
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Ecoplastic and RFTech is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ecoplastic and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and Ecoplastic 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 Ecoplastic 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 Ecoplastic i.e., Ecoplastic and RFTech go up and down completely randomly.
Pair Corralation between Ecoplastic and RFTech
Assuming the 90 days trading horizon Ecoplastic is expected to under-perform the RFTech. In addition to that, Ecoplastic is 1.39 times more volatile than RFTech Co. It trades about -0.07 of its total potential returns per unit of risk. RFTech Co is currently generating about -0.01 per unit of volatility. If you would invest 397,500 in RFTech Co on October 14, 2024 and sell it today you would lose (27,500) from holding RFTech Co or give up 6.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecoplastic vs. RFTech Co
Performance |
| Timeline |
| Ecoplastic |
| RFTech |
Ecoplastic and RFTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecoplastic and RFTech
The main advantage of trading using opposite Ecoplastic and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecoplastic 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.| Ecoplastic vs. Woori Technology | Ecoplastic vs. Lotte Rental Co | Ecoplastic vs. Hotel Shilla Co | Ecoplastic vs. iNtRON Biotechnology |
| RFTech vs. Daehan Steel | RFTech vs. Hyundai Engineering Construction | RFTech vs. SeAH Besteel Corp | RFTech vs. Seohee Construction 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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