Correlation Between Song Ho and Rafael Microelectronics
Can any of the company-specific risk be diversified away by investing in both Song Ho and Rafael Microelectronics 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 Song Ho and Rafael Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Song Ho Industrial and Rafael Microelectronics, you can compare the effects of market volatilities on Song Ho and Rafael Microelectronics 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 Song Ho with a short position of Rafael Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Song Ho and Rafael Microelectronics.
Diversification Opportunities for Song Ho and Rafael Microelectronics
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Song and Rafael is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Song Ho Industrial and Rafael Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rafael Microelectronics and Song Ho 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 Song Ho Industrial are associated (or correlated) with Rafael Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rafael Microelectronics has no effect on the direction of Song Ho i.e., Song Ho and Rafael Microelectronics go up and down completely randomly.
Pair Corralation between Song Ho and Rafael Microelectronics
Assuming the 90 days trading horizon Song Ho is expected to generate 2055.83 times less return on investment than Rafael Microelectronics. But when comparing it to its historical volatility, Song Ho Industrial is 10.5 times less risky than Rafael Microelectronics. It trades about 0.0 of its potential returns per unit of risk. Rafael Microelectronics is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 12,050 in Rafael Microelectronics on October 26, 2024 and sell it today you would earn a total of 3,350 from holding Rafael Microelectronics or generate 27.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Song Ho Industrial vs. Rafael Microelectronics
Performance |
| Timeline |
| Song Ho Industrial |
| Rafael Microelectronics |
Song Ho and Rafael Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Song Ho and Rafael Microelectronics
The main advantage of trading using opposite Song Ho and Rafael Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Song Ho position performs unexpectedly, Rafael Microelectronics 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 Rafael Microelectronics will offset losses from the drop in Rafael Microelectronics' long position.| Song Ho vs. Hotel Holiday Garden | Song Ho vs. WinMate Communication INC | Song Ho vs. Loop Telecommunication International | Song Ho vs. U Media Communications |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |