Correlation Between RFTech and JC Chemical
Can any of the company-specific risk be diversified away by investing in both RFTech and JC Chemical 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 JC Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RFTech Co and JC Chemical Co, you can compare the effects of market volatilities on RFTech and JC Chemical 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 JC Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of RFTech and JC Chemical.
Diversification Opportunities for RFTech and JC Chemical
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RFTech and 137950 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and JC Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JC Chemical 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 JC Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JC Chemical has no effect on the direction of RFTech i.e., RFTech and JC Chemical go up and down completely randomly.
Pair Corralation between RFTech and JC Chemical
Assuming the 90 days trading horizon RFTech Co is expected to generate 0.48 times more return on investment than JC Chemical. However, RFTech Co is 2.09 times less risky than JC Chemical. It trades about 0.31 of its potential returns per unit of risk. JC Chemical Co is currently generating about -0.15 per unit of risk. If you would invest 301,500 in RFTech Co on September 1, 2024 and sell it today you would earn a total of 41,500 from holding RFTech Co or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RFTech Co vs. JC Chemical Co
Performance |
| Timeline |
| RFTech |
| JC Chemical |
RFTech and JC Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RFTech and JC Chemical
The main advantage of trading using opposite RFTech and JC Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RFTech position performs unexpectedly, JC Chemical 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 JC Chemical will offset losses from the drop in JC Chemical's long position.| RFTech vs. Kukil Metal Co | RFTech vs. Osang Healthcare Co,Ltd | RFTech vs. CKH Food Health | RFTech vs. Infinitt Healthcare Co |
| JC Chemical vs. Korea Information Engineering | JC Chemical vs. DataSolution | JC Chemical vs. Cube Entertainment | JC Chemical vs. SCI Information Service |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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