Correlation Between RF Materials and Mirae Asset
Can any of the company-specific risk be diversified away by investing in both RF Materials and Mirae Asset 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 RF Materials and Mirae Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Materials Co and Mirae Asset Daewoo, you can compare the effects of market volatilities on RF Materials and Mirae Asset 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 RF Materials with a short position of Mirae Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Materials and Mirae Asset.
Diversification Opportunities for RF Materials and Mirae Asset
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 327260 and Mirae is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding RF Materials Co and Mirae Asset Daewoo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirae Asset Daewoo and RF 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 RF Materials Co are associated (or correlated) with Mirae Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirae Asset Daewoo has no effect on the direction of RF Materials i.e., RF Materials and Mirae Asset go up and down completely randomly.
Pair Corralation between RF Materials and Mirae Asset
Assuming the 90 days trading horizon RF Materials Co is expected to generate 5.08 times more return on investment than Mirae Asset. However, RF Materials is 5.08 times more volatile than Mirae Asset Daewoo. It trades about 0.09 of its potential returns per unit of risk. Mirae Asset Daewoo is currently generating about 0.32 per unit of risk. If you would invest 572,000 in RF Materials Co on November 29, 2024 and sell it today you would earn a total of 30,000 from holding RF Materials Co or generate 5.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RF Materials Co vs. Mirae Asset Daewoo
Performance |
| Timeline |
| RF Materials |
| Mirae Asset Daewoo |
RF Materials and Mirae Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Materials and Mirae Asset
The main advantage of trading using opposite RF Materials and Mirae Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Materials position performs unexpectedly, Mirae Asset 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 Mirae Asset will offset losses from the drop in Mirae Asset's long position.| RF Materials vs. Samyoung Electronics Co | RF Materials vs. PLAYWITH | RF Materials vs. Wave Electronics Co | RF Materials vs. Display Tech Co |
| Mirae Asset vs. Ecoplastic | Mirae Asset vs. National Plastic Co | Mirae Asset vs. ADTechnology CoLtd | Mirae Asset vs. Puloon 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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