Correlation Between RFTech and UNISEM
Can any of the company-specific risk be diversified away by investing in both RFTech and UNISEM 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 UNISEM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RFTech Co and UNISEM Co, you can compare the effects of market volatilities on RFTech and UNISEM 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 UNISEM. Check out your portfolio center. Please also check ongoing floating volatility patterns of RFTech and UNISEM.
Diversification Opportunities for RFTech and UNISEM
Excellent diversification
The 3 months correlation between RFTech and UNISEM is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and UNISEM Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNISEM 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 UNISEM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNISEM has no effect on the direction of RFTech i.e., RFTech and UNISEM go up and down completely randomly.
Pair Corralation between RFTech and UNISEM
Assuming the 90 days trading horizon RFTech Co is expected to generate 0.81 times more return on investment than UNISEM. However, RFTech Co is 1.23 times less risky than UNISEM. It trades about 0.12 of its potential returns per unit of risk. UNISEM Co is currently generating about -0.04 per unit of risk. If you would invest 311,000 in RFTech Co on October 14, 2024 and sell it today you would earn a total of 59,000 from holding RFTech Co or generate 18.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RFTech Co vs. UNISEM Co
Performance |
| Timeline |
| RFTech |
| UNISEM |
RFTech and UNISEM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RFTech and UNISEM
The main advantage of trading using opposite RFTech and UNISEM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RFTech position performs unexpectedly, UNISEM 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 UNISEM will offset losses from the drop in UNISEM's long position.| RFTech vs. Daehan Steel | RFTech vs. Hyundai Engineering Construction | RFTech vs. SeAH Besteel Corp | RFTech vs. Seohee Construction Co |
| UNISEM vs. Pureun Mutual Savings | UNISEM vs. Hyundai Industrial Co | UNISEM vs. LEENO Industrial | UNISEM vs. Daejung Chemicals Metals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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