Correlation Between Foodnamoo and RF Materials
Can any of the company-specific risk be diversified away by investing in both Foodnamoo and RF Materials 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 Foodnamoo and RF Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Foodnamoo and RF Materials Co, you can compare the effects of market volatilities on Foodnamoo and RF Materials 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 Foodnamoo with a short position of RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Foodnamoo and RF Materials.
Diversification Opportunities for Foodnamoo and RF Materials
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Foodnamoo and 327260 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Foodnamoo and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials and Foodnamoo 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 Foodnamoo are associated (or correlated) with RF Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF Materials has no effect on the direction of Foodnamoo i.e., Foodnamoo and RF Materials go up and down completely randomly.
Pair Corralation between Foodnamoo and RF Materials
Assuming the 90 days trading horizon Foodnamoo is expected to under-perform the RF Materials. In addition to that, Foodnamoo is 1.31 times more volatile than RF Materials Co. It trades about -0.07 of its total potential returns per unit of risk. RF Materials Co is currently generating about -0.05 per unit of volatility. If you would invest 1,078,000 in RF Materials Co on November 9, 2024 and sell it today you would lose (464,000) from holding RF Materials Co or give up 43.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Foodnamoo vs. RF Materials Co
Performance |
| Timeline |
| Foodnamoo |
| RF Materials |
Foodnamoo and RF Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Foodnamoo and RF Materials
The main advantage of trading using opposite Foodnamoo and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Foodnamoo position performs unexpectedly, RF Materials 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 RF Materials will offset losses from the drop in RF Materials' long position.| Foodnamoo vs. Cherrybro coLtd | Foodnamoo vs. Busan Industrial Co | Foodnamoo vs. Busan Ind | Foodnamoo vs. Mirae Asset Daewoo |
| RF Materials vs. Alton Sports CoLtd | RF Materials vs. LAKE MATERIALS LTD | RF Materials vs. WONIK Materials CoLtd | RF Materials vs. Ecoplastic |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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