Correlation Between RF Materials and Hyosung Advanced
Can any of the company-specific risk be diversified away by investing in both RF Materials and Hyosung Advanced 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 Hyosung Advanced 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 Hyosung Advanced Materials, you can compare the effects of market volatilities on RF Materials and Hyosung Advanced 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 Hyosung Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Materials and Hyosung Advanced.
Diversification Opportunities for RF Materials and Hyosung Advanced
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between 327260 and Hyosung is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding RF Materials Co and Hyosung Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyosung Advanced Mat 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 Hyosung Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyosung Advanced Mat has no effect on the direction of RF Materials i.e., RF Materials and Hyosung Advanced go up and down completely randomly.
Pair Corralation between RF Materials and Hyosung Advanced
Assuming the 90 days trading horizon RF Materials Co is expected to under-perform the Hyosung Advanced. In addition to that, RF Materials is 1.57 times more volatile than Hyosung Advanced Materials. It trades about -0.25 of its total potential returns per unit of risk. Hyosung Advanced Materials is currently generating about -0.07 per unit of volatility. If you would invest 19,530,000 in Hyosung Advanced Materials on September 12, 2024 and sell it today you would lose (1,340,000) from holding Hyosung Advanced Materials or give up 6.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RF Materials Co vs. Hyosung Advanced Materials
Performance |
| Timeline |
| RF Materials |
| Hyosung Advanced Mat |
RF Materials and Hyosung Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Materials and Hyosung Advanced
The main advantage of trading using opposite RF Materials and Hyosung Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Materials position performs unexpectedly, Hyosung Advanced 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 Hyosung Advanced will offset losses from the drop in Hyosung Advanced's long position.| RF Materials vs. SK Hynix | RF Materials vs. People Technology | RF Materials vs. Hana Materials | RF Materials vs. SIMMTECH Co |
| Hyosung Advanced vs. Solution Advanced Technology | Hyosung Advanced vs. Busan Industrial Co | Hyosung Advanced vs. Busan Ind | Hyosung Advanced vs. Sam Chun Dang |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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