Correlation Between RF Materials and Hyundai Green
Can any of the company-specific risk be diversified away by investing in both RF Materials and Hyundai Green 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 Hyundai Green 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 Hyundai Green Food, you can compare the effects of market volatilities on RF Materials and Hyundai Green 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 Hyundai Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Materials and Hyundai Green.
Diversification Opportunities for RF Materials and Hyundai Green
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between 327260 and Hyundai is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding RF Materials Co and Hyundai Green Food in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyundai Green Food 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 Hyundai Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyundai Green Food has no effect on the direction of RF Materials i.e., RF Materials and Hyundai Green go up and down completely randomly.
Pair Corralation between RF Materials and Hyundai Green
Assuming the 90 days trading horizon RF Materials Co is expected to generate 0.7 times more return on investment than Hyundai Green. However, RF Materials Co is 1.43 times less risky than Hyundai Green. It trades about 0.66 of its potential returns per unit of risk. Hyundai Green Food is currently generating about -0.03 per unit of risk. If you would invest 492,500 in RF Materials Co on November 1, 2024 and sell it today you would earn a total of 76,500 from holding RF Materials Co or generate 15.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RF Materials Co vs. Hyundai Green Food
Performance |
| Timeline |
| RF Materials |
| Hyundai Green Food |
RF Materials and Hyundai Green Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Materials and Hyundai Green
The main advantage of trading using opposite RF Materials and Hyundai Green positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Materials position performs unexpectedly, Hyundai Green 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 Hyundai Green will offset losses from the drop in Hyundai Green's long position.| RF Materials vs. Duksan Hi Metal | RF Materials vs. Dongbang Transport Logistics | RF Materials vs. Samji Electronics Co | RF Materials vs. Daeduck Electronics Co |
| Hyundai Green vs. Daiyang Metal Co | Hyundai Green vs. Dongbang Transport Logistics | Hyundai Green vs. ADTechnology CoLtd | Hyundai Green vs. RFTech Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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