Correlation Between RFTech and Handok Clean
Can any of the company-specific risk be diversified away by investing in both RFTech and Handok Clean 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 Handok Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RFTech Co and Handok Clean Tech, you can compare the effects of market volatilities on RFTech and Handok Clean 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 Handok Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of RFTech and Handok Clean.
Diversification Opportunities for RFTech and Handok Clean
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RFTech and Handok is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and Handok Clean Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handok Clean Tech 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 Handok Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handok Clean Tech has no effect on the direction of RFTech i.e., RFTech and Handok Clean go up and down completely randomly.
Pair Corralation between RFTech and Handok Clean
Assuming the 90 days trading horizon RFTech Co is expected to generate 2.76 times more return on investment than Handok Clean. However, RFTech is 2.76 times more volatile than Handok Clean Tech. It trades about 0.32 of its potential returns per unit of risk. Handok Clean Tech is currently generating about -0.32 per unit of risk. If you would invest 302,500 in RFTech Co on September 3, 2024 and sell it today you would earn a total of 40,500 from holding RFTech Co or generate 13.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RFTech Co vs. Handok Clean Tech
Performance |
| Timeline |
| RFTech |
| Handok Clean Tech |
RFTech and Handok Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RFTech and Handok Clean
The main advantage of trading using opposite RFTech and Handok Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RFTech position performs unexpectedly, Handok Clean 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 Handok Clean will offset losses from the drop in Handok Clean's long position.| RFTech vs. Lake Materials Co | RFTech vs. LS Materials | RFTech vs. Hana Materials | RFTech vs. Infinitt Healthcare Co |
| Handok Clean vs. Busan Industrial Co | Handok Clean vs. UNISEM Co | Handok Clean vs. RPBio Inc | Handok Clean vs. Finebesteel |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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