Correlation Between Rafael Microelectronics and Century Wind
Can any of the company-specific risk be diversified away by investing in both Rafael Microelectronics and Century Wind 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 Rafael Microelectronics and Century Wind into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rafael Microelectronics and Century Wind Power, you can compare the effects of market volatilities on Rafael Microelectronics and Century Wind 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 Rafael Microelectronics with a short position of Century Wind. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rafael Microelectronics and Century Wind.
Diversification Opportunities for Rafael Microelectronics and Century Wind
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rafael and Century is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Rafael Microelectronics and Century Wind Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Wind Power and Rafael Microelectronics 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 Rafael Microelectronics are associated (or correlated) with Century Wind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Wind Power has no effect on the direction of Rafael Microelectronics i.e., Rafael Microelectronics and Century Wind go up and down completely randomly.
Pair Corralation between Rafael Microelectronics and Century Wind
Assuming the 90 days trading horizon Rafael Microelectronics is expected to generate 2.02 times more return on investment than Century Wind. However, Rafael Microelectronics is 2.02 times more volatile than Century Wind Power. It trades about 0.01 of its potential returns per unit of risk. Century Wind Power is currently generating about -0.01 per unit of risk. If you would invest 12,550 in Rafael Microelectronics on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Rafael Microelectronics or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rafael Microelectronics vs. Century Wind Power
Performance |
| Timeline |
| Rafael Microelectronics |
| Century Wind Power |
Rafael Microelectronics and Century Wind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rafael Microelectronics and Century Wind
The main advantage of trading using opposite Rafael Microelectronics and Century Wind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rafael Microelectronics position performs unexpectedly, Century Wind 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 Century Wind will offset losses from the drop in Century Wind's long position.| Rafael Microelectronics vs. AU Optronics | Rafael Microelectronics vs. Innolux Corp | Rafael Microelectronics vs. Ruentex Development Co | Rafael Microelectronics vs. WiseChip Semiconductor |
| Century Wind vs. Advanced Wireless Semiconductor | Century Wind vs. Shanghai Commercial Savings | Century Wind vs. Central Reinsurance Corp | Century Wind vs. TWOWAY 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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