Correlation Between INtRON Biotechnology and RF Materials
Can any of the company-specific risk be diversified away by investing in both INtRON Biotechnology 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 INtRON Biotechnology and RF Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iNtRON Biotechnology and RF Materials Co, you can compare the effects of market volatilities on INtRON Biotechnology 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 INtRON Biotechnology with a short position of RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of INtRON Biotechnology and RF Materials.
Diversification Opportunities for INtRON Biotechnology and RF Materials
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between INtRON and 327260 is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding iNtRON Biotechnology and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials and INtRON Biotechnology 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 iNtRON Biotechnology 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 INtRON Biotechnology i.e., INtRON Biotechnology and RF Materials go up and down completely randomly.
Pair Corralation between INtRON Biotechnology and RF Materials
Assuming the 90 days trading horizon iNtRON Biotechnology is expected to generate 1.26 times more return on investment than RF Materials. However, INtRON Biotechnology is 1.26 times more volatile than RF Materials Co. It trades about -0.01 of its potential returns per unit of risk. RF Materials Co is currently generating about -0.05 per unit of risk. If you would invest 860,845 in iNtRON Biotechnology on October 27, 2024 and sell it today you would lose (304,845) from holding iNtRON Biotechnology or give up 35.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iNtRON Biotechnology vs. RF Materials Co
Performance |
| Timeline |
| iNtRON Biotechnology |
| RF Materials |
INtRON Biotechnology and RF Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INtRON Biotechnology and RF Materials
The main advantage of trading using opposite INtRON Biotechnology and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INtRON Biotechnology 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.| INtRON Biotechnology vs. Medy Tox | INtRON Biotechnology vs. Oscotec | INtRON Biotechnology vs. Genexine | INtRON Biotechnology vs. Helixmith Co |
| RF Materials vs. SK Hynix | RF Materials vs. LX Semicon Co | RF Materials vs. Tokai Carbon Korea | RF Materials vs. People 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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