Correlation Between Rafael Microelectronics and Launch Technologies
Can any of the company-specific risk be diversified away by investing in both Rafael Microelectronics and Launch Technologies 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 Launch Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rafael Microelectronics and Launch Technologies Co, you can compare the effects of market volatilities on Rafael Microelectronics and Launch Technologies 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 Launch Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rafael Microelectronics and Launch Technologies.
Diversification Opportunities for Rafael Microelectronics and Launch Technologies
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rafael and Launch is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Rafael Microelectronics and Launch Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Launch Technologies 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 Launch Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Launch Technologies has no effect on the direction of Rafael Microelectronics i.e., Rafael Microelectronics and Launch Technologies go up and down completely randomly.
Pair Corralation between Rafael Microelectronics and Launch Technologies
Assuming the 90 days trading horizon Rafael Microelectronics is expected to generate 1.01 times more return on investment than Launch Technologies. However, Rafael Microelectronics is 1.01 times more volatile than Launch Technologies Co. It trades about 0.0 of its potential returns per unit of risk. Launch Technologies Co is currently generating about -0.11 per unit of risk. If you would invest 13,876 in Rafael Microelectronics on September 12, 2024 and sell it today you would lose (1,326) from holding Rafael Microelectronics or give up 9.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.98% |
| Values | Daily Returns |
Rafael Microelectronics vs. Launch Technologies Co
Performance |
| Timeline |
| Rafael Microelectronics |
| Launch Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Rafael Microelectronics and Launch Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rafael Microelectronics and Launch Technologies
The main advantage of trading using opposite Rafael Microelectronics and Launch Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rafael Microelectronics position performs unexpectedly, Launch Technologies 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 Launch Technologies will offset losses from the drop in Launch Technologies' long position.| Rafael Microelectronics vs. AU Optronics | Rafael Microelectronics vs. Innolux Corp | Rafael Microelectronics vs. Ruentex Development Co | Rafael Microelectronics vs. WiseChip Semiconductor |
| Launch Technologies vs. Rafael Microelectronics | Launch Technologies vs. Ligitek Electronics Co | Launch Technologies vs. Hannstar Display Corp | Launch Technologies vs. Compal Electronics |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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