Correlation Between Sungchang Autotech and RFTech
Can any of the company-specific risk be diversified away by investing in both Sungchang Autotech and RFTech 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 Sungchang Autotech and RFTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sungchang Autotech Co and RFTech Co, you can compare the effects of market volatilities on Sungchang Autotech and RFTech 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 Sungchang Autotech with a short position of RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sungchang Autotech and RFTech.
Diversification Opportunities for Sungchang Autotech and RFTech
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sungchang and RFTech is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sungchang Autotech Co and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and Sungchang Autotech 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 Sungchang Autotech Co are associated (or correlated) with RFTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFTech has no effect on the direction of Sungchang Autotech i.e., Sungchang Autotech and RFTech go up and down completely randomly.
Pair Corralation between Sungchang Autotech and RFTech
Assuming the 90 days trading horizon Sungchang Autotech Co is expected to under-perform the RFTech. In addition to that, Sungchang Autotech is 1.24 times more volatile than RFTech Co. It trades about -0.05 of its total potential returns per unit of risk. RFTech Co is currently generating about -0.05 per unit of volatility. If you would invest 393,500 in RFTech Co on August 27, 2024 and sell it today you would lose (70,500) from holding RFTech Co or give up 17.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sungchang Autotech Co vs. RFTech Co
Performance |
| Timeline |
| Sungchang Autotech |
| RFTech |
Sungchang Autotech and RFTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sungchang Autotech and RFTech
The main advantage of trading using opposite Sungchang Autotech and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sungchang Autotech position performs unexpectedly, RFTech 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 RFTech will offset losses from the drop in RFTech's long position.| Sungchang Autotech vs. Busan Industrial Co | Sungchang Autotech vs. Busan Ind | Sungchang Autotech vs. Mirae Asset Daewoo | Sungchang Autotech vs. UNISEM Co |
| RFTech vs. Samsung Electronics Co | RFTech vs. Samsung Electronics Co | RFTech vs. Hyundai Motor Co | RFTech vs. Hyundai Motor |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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