Correlation Between WONIK Materials and RF Materials
Can any of the company-specific risk be diversified away by investing in both WONIK Materials 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 WONIK Materials and RF Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WONIK Materials CoLtd and RF Materials Co, you can compare the effects of market volatilities on WONIK Materials 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 WONIK Materials with a short position of RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of WONIK Materials and RF Materials.
Diversification Opportunities for WONIK Materials and RF Materials
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WONIK and 327260 is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding WONIK Materials CoLtd and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials and WONIK 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 WONIK Materials CoLtd 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 WONIK Materials i.e., WONIK Materials and RF Materials go up and down completely randomly.
Pair Corralation between WONIK Materials and RF Materials
Assuming the 90 days trading horizon WONIK Materials CoLtd is expected to generate 0.47 times more return on investment than RF Materials. However, WONIK Materials CoLtd is 2.12 times less risky than RF Materials. It trades about 0.07 of its potential returns per unit of risk. RF Materials Co is currently generating about -0.27 per unit of risk. If you would invest 1,765,000 in WONIK Materials CoLtd on September 15, 2024 and sell it today you would earn a total of 63,000 from holding WONIK Materials CoLtd or generate 3.57% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
WONIK Materials CoLtd vs. RF Materials Co
Performance |
Timeline |
WONIK Materials CoLtd |
RF Materials |
WONIK Materials and RF Materials Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WONIK Materials and RF Materials
The main advantage of trading using opposite WONIK Materials and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WONIK Materials 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.WONIK Materials vs. Soulbrain Holdings Co | WONIK Materials vs. Wonik Ips Co | WONIK Materials vs. TES Co | WONIK Materials vs. Suprema |
RF Materials vs. Kukil Metal Co | RF Materials vs. Kakao Games Corp | RF Materials vs. SV Investment | RF Materials vs. Korea Investment Holdings |
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 CEOs Directory module to screen CEOs from public companies around the world.
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