Correlation Between Hana Materials and RFTech
Can any of the company-specific risk be diversified away by investing in both Hana Materials 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 Hana Materials and RFTech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hana Materials and RFTech Co, you can compare the effects of market volatilities on Hana Materials 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 Hana Materials with a short position of RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hana Materials and RFTech.
Diversification Opportunities for Hana Materials and RFTech
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hana and RFTech is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Hana Materials and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and Hana Materials 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 Hana Materials 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 Hana Materials i.e., Hana Materials and RFTech go up and down completely randomly.
Pair Corralation between Hana Materials and RFTech
Assuming the 90 days trading horizon Hana Materials is expected to generate 1.73 times more return on investment than RFTech. However, Hana Materials is 1.73 times more volatile than RFTech Co. It trades about -0.01 of its potential returns per unit of risk. RFTech Co is currently generating about -0.03 per unit of risk. If you would invest 3,536,537 in Hana Materials on September 4, 2024 and sell it today you would lose (1,251,537) from holding Hana Materials or give up 35.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hana Materials vs. RFTech Co
Performance |
| Timeline |
| Hana Materials |
| RFTech |
Hana Materials and RFTech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hana Materials and RFTech
The main advantage of trading using opposite Hana Materials and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hana Materials 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.| Hana Materials vs. SK Hynix | Hana Materials vs. LX Semicon Co | Hana Materials vs. Tokai Carbon Korea | Hana Materials vs. People Technology |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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