Correlation Between RFTech and EV Advanced
Can any of the company-specific risk be diversified away by investing in both RFTech and EV Advanced 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 EV Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RFTech Co and EV Advanced Material, you can compare the effects of market volatilities on RFTech and EV Advanced 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 EV Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of RFTech and EV Advanced.
Diversification Opportunities for RFTech and EV Advanced
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RFTech and 131400 is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and EV Advanced Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EV Advanced Material 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 EV Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EV Advanced Material has no effect on the direction of RFTech i.e., RFTech and EV Advanced go up and down completely randomly.
Pair Corralation between RFTech and EV Advanced
Assuming the 90 days trading horizon RFTech Co is expected to under-perform the EV Advanced. But the stock apears to be less risky and, when comparing its historical volatility, RFTech Co is 3.35 times less risky than EV Advanced. The stock trades about -0.03 of its potential returns per unit of risk. The EV Advanced Material is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 168,637 in EV Advanced Material on October 26, 2024 and sell it today you would earn a total of 15,763 from holding EV Advanced Material or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
RFTech Co vs. EV Advanced Material
Performance |
| Timeline |
| RFTech |
| EV Advanced Material |
RFTech and EV Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RFTech and EV Advanced
The main advantage of trading using opposite RFTech and EV Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RFTech position performs unexpectedly, EV Advanced 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 EV Advanced will offset losses from the drop in EV Advanced's long position.| RFTech vs. Sungdo Engineering Construction | RFTech vs. Dongbang Ship Machinery | RFTech vs. Camus Engineering Construction | RFTech vs. Daejung Chemicals Metals |
| EV Advanced vs. Samsung Electronics Co | EV Advanced vs. Samsung Electronics Co | EV Advanced vs. SK Hynix | EV Advanced vs. HMM 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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