Correlation Between RFTech and Samyang Foods
Can any of the company-specific risk be diversified away by investing in both RFTech and Samyang Foods 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 RFTech and Samyang Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RFTech Co and Samyang Foods Co, you can compare the effects of market volatilities on RFTech and Samyang Foods 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 RFTech with a short position of Samyang Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of RFTech and Samyang Foods.
Diversification Opportunities for RFTech and Samyang Foods
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RFTech and Samyang is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and Samyang Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samyang Foods and RFTech 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 RFTech Co are associated (or correlated) with Samyang Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samyang Foods has no effect on the direction of RFTech i.e., RFTech and Samyang Foods go up and down completely randomly.
Pair Corralation between RFTech and Samyang Foods
Assuming the 90 days trading horizon RFTech Co is expected to generate 0.72 times more return on investment than Samyang Foods. However, RFTech Co is 1.38 times less risky than Samyang Foods. It trades about 0.0 of its potential returns per unit of risk. Samyang Foods Co is currently generating about -0.19 per unit of risk. If you would invest 383,500 in RFTech Co on November 7, 2024 and sell it today you would lose (1,000.00) from holding RFTech Co or give up 0.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
RFTech Co vs. Samyang Foods Co
Performance |
| Timeline |
| RFTech |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Samyang Foods |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
RFTech and Samyang Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RFTech and Samyang Foods
The main advantage of trading using opposite RFTech and Samyang Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RFTech position performs unexpectedly, Samyang Foods 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 Samyang Foods will offset losses from the drop in Samyang Foods' long position.| RFTech vs. UJU Electronics Co | RFTech vs. Samsung Publishing Co | RFTech vs. Woori Technology | RFTech vs. Seoul Electronics Telecom |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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