Correlation Between Wireless Power and Rainbow Robotics
Can any of the company-specific risk be diversified away by investing in both Wireless Power and Rainbow Robotics 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 Wireless Power and Rainbow Robotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wireless Power Amplifier and Rainbow Robotics, you can compare the effects of market volatilities on Wireless Power and Rainbow Robotics 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 Wireless Power with a short position of Rainbow Robotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wireless Power and Rainbow Robotics.
Diversification Opportunities for Wireless Power and Rainbow Robotics
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wireless and Rainbow is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Wireless Power Amplifier and Rainbow Robotics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rainbow Robotics and Wireless Power 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 Wireless Power Amplifier are associated (or correlated) with Rainbow Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rainbow Robotics has no effect on the direction of Wireless Power i.e., Wireless Power and Rainbow Robotics go up and down completely randomly.
Pair Corralation between Wireless Power and Rainbow Robotics
Assuming the 90 days trading horizon Wireless Power Amplifier is expected to under-perform the Rainbow Robotics. But the stock apears to be less risky and, when comparing its historical volatility, Wireless Power Amplifier is 1.8 times less risky than Rainbow Robotics. The stock trades about -0.34 of its potential returns per unit of risk. The Rainbow Robotics is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 12,500,000 in Rainbow Robotics on August 30, 2024 and sell it today you would earn a total of 2,800,000 from holding Rainbow Robotics or generate 22.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wireless Power Amplifier vs. Rainbow Robotics
Performance |
| Timeline |
| Wireless Power Amplifier |
| Rainbow Robotics |
Wireless Power and Rainbow Robotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wireless Power and Rainbow Robotics
The main advantage of trading using opposite Wireless Power and Rainbow Robotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wireless Power position performs unexpectedly, Rainbow Robotics 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 Rainbow Robotics will offset losses from the drop in Rainbow Robotics' long position.| Wireless Power vs. Samyang Foods Co | Wireless Power vs. LG Household Healthcare | Wireless Power vs. Daou Data Corp | Wireless Power vs. Haitai Confectionery Foods |
| Rainbow Robotics vs. Songwon Industrial Co | Rainbow Robotics vs. Green Cross Medical | Rainbow Robotics vs. Myoung Shin Industrial | Rainbow Robotics vs. Seoyon Topmetal 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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