Correlation Between ANT and RCE Capital
Can any of the company-specific risk be diversified away by investing in both ANT and RCE Capital 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 ANT and RCE Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANT and RCE Capital Berhad, you can compare the effects of market volatilities on ANT and RCE Capital 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 ANT with a short position of RCE Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANT and RCE Capital.
Diversification Opportunities for ANT and RCE Capital
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between ANT and RCE is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding ANT and RCE Capital Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCE Capital Berhad and ANT 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 ANT are associated (or correlated) with RCE Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCE Capital Berhad has no effect on the direction of ANT i.e., ANT and RCE Capital go up and down completely randomly.
Pair Corralation between ANT and RCE Capital
Assuming the 90 days trading horizon ANT is expected to generate 14.11 times more return on investment than RCE Capital. However, ANT is 14.11 times more volatile than RCE Capital Berhad. It trades about 0.06 of its potential returns per unit of risk. RCE Capital Berhad is currently generating about -0.16 per unit of risk. If you would invest 145.00 in ANT on October 9, 2024 and sell it today you would earn a total of 2.00 from holding ANT or generate 1.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANT vs. RCE Capital Berhad
Performance |
| Timeline |
| ANT |
| RCE Capital Berhad |
ANT and RCE Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANT and RCE Capital
The main advantage of trading using opposite ANT and RCE Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANT position performs unexpectedly, RCE Capital 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 RCE Capital will offset losses from the drop in RCE Capital's long position.The idea behind ANT and RCE Capital Berhad pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| RCE Capital vs. Cosmos Technology International | RCE Capital vs. Alliance Financial Group | RCE Capital vs. Malayan Banking Bhd | RCE Capital vs. Dufu Tech Corp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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