Correlation Between Launch Technologies and Rafael Microelectronics
Can any of the company-specific risk be diversified away by investing in both Launch Technologies 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 Launch Technologies and Rafael Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Launch Technologies Co and Rafael Microelectronics, you can compare the effects of market volatilities on Launch Technologies 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 Launch Technologies with a short position of Rafael Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Launch Technologies and Rafael Microelectronics.
Diversification Opportunities for Launch Technologies and Rafael Microelectronics
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Launch and Rafael is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Launch Technologies Co and Rafael Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rafael Microelectronics and Launch Technologies 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 Launch Technologies Co 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 Launch Technologies i.e., Launch Technologies and Rafael Microelectronics go up and down completely randomly.
Pair Corralation between Launch Technologies and Rafael Microelectronics
Assuming the 90 days trading horizon Launch Technologies Co is expected to under-perform the Rafael Microelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Launch Technologies Co is 1.01 times less risky than Rafael Microelectronics. The stock trades about -0.11 of its potential returns per unit of risk. The Rafael Microelectronics is currently generating about 0.0 of returns per unit of risk over similar time horizon. 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 |
Launch Technologies Co vs. Rafael Microelectronics
Performance |
| Timeline |
| Launch Technologies |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Rafael Microelectronics |
Launch Technologies and Rafael Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Launch Technologies and Rafael Microelectronics
The main advantage of trading using opposite Launch Technologies and Rafael Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Launch Technologies 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.| Launch Technologies vs. Rafael Microelectronics | Launch Technologies vs. Ligitek Electronics Co | Launch Technologies vs. Hannstar Display Corp | Launch Technologies vs. Compal Electronics |
| Rafael Microelectronics vs. AU Optronics | Rafael Microelectronics vs. Innolux Corp | Rafael Microelectronics vs. Ruentex Development Co | Rafael Microelectronics vs. WiseChip Semiconductor |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |