Correlation Between RFTech and Kbi Metal
Can any of the company-specific risk be diversified away by investing in both RFTech and Kbi Metal 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 Kbi Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RFTech Co and Kbi Metal Co, you can compare the effects of market volatilities on RFTech and Kbi Metal 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 Kbi Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of RFTech and Kbi Metal.
Diversification Opportunities for RFTech and Kbi Metal
Pay attention - limited upside
The 3 months correlation between RFTech and Kbi is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and Kbi Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kbi Metal 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 Kbi Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kbi Metal has no effect on the direction of RFTech i.e., RFTech and Kbi Metal go up and down completely randomly.
Pair Corralation between RFTech and Kbi Metal
Assuming the 90 days trading horizon RFTech Co is expected to under-perform the Kbi Metal. But the stock apears to be less risky and, when comparing its historical volatility, RFTech Co is 1.69 times less risky than Kbi Metal. The stock trades about -0.07 of its potential returns per unit of risk. The Kbi Metal Co is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 196,900 in Kbi Metal Co on October 14, 2024 and sell it today you would earn a total of 22,600 from holding Kbi Metal Co or generate 11.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RFTech Co vs. Kbi Metal Co
Performance |
| Timeline |
| RFTech |
| Kbi Metal |
RFTech and Kbi Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RFTech and Kbi Metal
The main advantage of trading using opposite RFTech and Kbi Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RFTech position performs unexpectedly, Kbi Metal 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 Kbi Metal will offset losses from the drop in Kbi Metal's long position.| RFTech vs. Koryo Credit Information | RFTech vs. Lotte Non Life Insurance | RFTech vs. Hana Financial | RFTech vs. Ecoplastic |
| Kbi Metal vs. FNSTech Co | Kbi Metal vs. RFTech Co | Kbi Metal vs. SS TECH | Kbi Metal vs. Sungchang Autotech 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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