Correlation Between People Technology and RF Materials
Can any of the company-specific risk be diversified away by investing in both People Technology 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 People Technology and RF Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between People Technology and RF Materials Co, you can compare the effects of market volatilities on People Technology 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 People Technology with a short position of RF Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of People Technology and RF Materials.
Diversification Opportunities for People Technology and RF Materials
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between People and 327260 is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding People Technology and RF Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF Materials and People Technology 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 People Technology 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 People Technology i.e., People Technology and RF Materials go up and down completely randomly.
Pair Corralation between People Technology and RF Materials
Assuming the 90 days trading horizon People Technology is expected to generate 4.11 times less return on investment than RF Materials. In addition to that, People Technology is 2.51 times more volatile than RF Materials Co. It trades about 0.06 of its total potential returns per unit of risk. RF Materials Co is currently generating about 0.66 per unit of volatility. If you would invest 495,000 in RF Materials Co on November 4, 2024 and sell it today you would earn a total of 77,000 from holding RF Materials Co or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
People Technology vs. RF Materials Co
Performance |
| Timeline |
| People Technology |
| RF Materials |
People Technology and RF Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with People Technology and RF Materials
The main advantage of trading using opposite People Technology and RF Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if People Technology 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.| People Technology vs. MetaLabs Co | People Technology vs. Duksan Hi Metal | People Technology vs. Miwon Chemical | People Technology vs. Formetal Co |
| RF Materials vs. EBEST Investment Securities | RF Materials vs. LB Investment | RF Materials vs. Golden Bridge Investment | RF Materials vs. Nice Information Telecommunication |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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