Correlation Between RDC Semiconductor and Aker Technology
Can any of the company-specific risk be diversified away by investing in both RDC Semiconductor and Aker Technology 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 RDC Semiconductor and Aker Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RDC Semiconductor Co and Aker Technology Co, you can compare the effects of market volatilities on RDC Semiconductor and Aker Technology 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 RDC Semiconductor with a short position of Aker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of RDC Semiconductor and Aker Technology.
Diversification Opportunities for RDC Semiconductor and Aker Technology
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RDC and Aker is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding RDC Semiconductor Co and Aker Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aker Technology and RDC Semiconductor 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 RDC Semiconductor Co are associated (or correlated) with Aker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aker Technology has no effect on the direction of RDC Semiconductor i.e., RDC Semiconductor and Aker Technology go up and down completely randomly.
Pair Corralation between RDC Semiconductor and Aker Technology
Assuming the 90 days trading horizon RDC Semiconductor Co is expected to under-perform the Aker Technology. But the stock apears to be less risky and, when comparing its historical volatility, RDC Semiconductor Co is 1.79 times less risky than Aker Technology. The stock trades about -0.11 of its potential returns per unit of risk. The Aker Technology Co is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,145 in Aker Technology Co on September 13, 2024 and sell it today you would earn a total of 325.00 from holding Aker Technology Co or generate 15.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RDC Semiconductor Co vs. Aker Technology Co
Performance |
| Timeline |
| RDC Semiconductor |
| Aker Technology |
RDC Semiconductor and Aker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RDC Semiconductor and Aker Technology
The main advantage of trading using opposite RDC Semiconductor and Aker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RDC Semiconductor position performs unexpectedly, Aker Technology 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 Aker Technology will offset losses from the drop in Aker Technology's long position.| RDC Semiconductor vs. Asmedia Technology | RDC Semiconductor vs. Amulaire Thermal Technology | RDC Semiconductor vs. Arbor Technology | RDC Semiconductor vs. Yuan High Tech Development |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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