Correlation Between RF Materials and Haitai Confectionery
Can any of the company-specific risk be diversified away by investing in both RF Materials and Haitai Confectionery 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 Haitai Confectionery 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 Haitai Confectionery Foods, you can compare the effects of market volatilities on RF Materials and Haitai Confectionery 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 Haitai Confectionery. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Materials and Haitai Confectionery.
Diversification Opportunities for RF Materials and Haitai Confectionery
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between 327260 and Haitai is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding RF Materials Co and Haitai Confectionery Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haitai Confectionery 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 Haitai Confectionery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haitai Confectionery has no effect on the direction of RF Materials i.e., RF Materials and Haitai Confectionery go up and down completely randomly.
Pair Corralation between RF Materials and Haitai Confectionery
Assuming the 90 days trading horizon RF Materials Co is expected to generate 1.11 times more return on investment than Haitai Confectionery. However, RF Materials is 1.11 times more volatile than Haitai Confectionery Foods. It trades about 0.67 of its potential returns per unit of risk. Haitai Confectionery Foods is currently generating about -0.11 per unit of risk. If you would invest 492,500 in RF Materials Co on November 3, 2024 and sell it today you would earn a total of 79,500 from holding RF Materials Co or generate 16.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RF Materials Co vs. Haitai Confectionery Foods
Performance |
| Timeline |
| RF Materials |
| Haitai Confectionery |
RF Materials and Haitai Confectionery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Materials and Haitai Confectionery
The main advantage of trading using opposite RF Materials and Haitai Confectionery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Materials position performs unexpectedly, Haitai Confectionery 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 Haitai Confectionery will offset losses from the drop in Haitai Confectionery's long position.| RF Materials vs. ChipsMedia | RF Materials vs. YG Entertainment | RF Materials vs. Jeong Moon Information | RF Materials vs. T3 Entertainment Co |
| Haitai Confectionery vs. TK Chemical | Haitai Confectionery vs. Samlip General Foods | Haitai Confectionery vs. Seoul Food Industrial | Haitai Confectionery vs. Tae Kyung Chemical |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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