Correlation Between Feutune Light and RF ACQUISITION
Can any of the company-specific risk be diversified away by investing in both Feutune Light and RF ACQUISITION 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 Feutune Light and RF ACQUISITION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Feutune Light Acquisition and RF ACQUISITION P, you can compare the effects of market volatilities on Feutune Light and RF ACQUISITION 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 Feutune Light with a short position of RF ACQUISITION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Feutune Light and RF ACQUISITION.
Diversification Opportunities for Feutune Light and RF ACQUISITION
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Feutune and RFACW is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Feutune Light Acquisition and RF ACQUISITION P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF ACQUISITION P and Feutune Light 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 Feutune Light Acquisition are associated (or correlated) with RF ACQUISITION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF ACQUISITION P has no effect on the direction of Feutune Light i.e., Feutune Light and RF ACQUISITION go up and down completely randomly.
Pair Corralation between Feutune Light and RF ACQUISITION
Assuming the 90 days horizon Feutune Light is expected to generate 4.85 times less return on investment than RF ACQUISITION. But when comparing it to its historical volatility, Feutune Light Acquisition is 2.35 times less risky than RF ACQUISITION. It trades about 0.09 of its potential returns per unit of risk. RF ACQUISITION P is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1.25 in RF ACQUISITION P on September 5, 2024 and sell it today you would earn a total of 0.83 from holding RF ACQUISITION P or generate 66.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.87% |
| Values | Daily Returns |
Feutune Light Acquisition vs. RF ACQUISITION P
Performance |
| Timeline |
| Feutune Light Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| RF ACQUISITION P |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Strong
Feutune Light and RF ACQUISITION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Feutune Light and RF ACQUISITION
The main advantage of trading using opposite Feutune Light and RF ACQUISITION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Feutune Light position performs unexpectedly, RF ACQUISITION 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 RF ACQUISITION will offset losses from the drop in RF ACQUISITION's long position.The idea behind Feutune Light Acquisition and RF ACQUISITION P 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.| RF ACQUISITION vs. Alpha One | RF ACQUISITION vs. Manaris Corp | RF ACQUISITION vs. SCOR PK | RF ACQUISITION vs. Aquagold International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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