Correlation Between Made Tech and Rockfire Resources
Can any of the company-specific risk be diversified away by investing in both Made Tech and Rockfire Resources 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 Made Tech and Rockfire Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Made Tech Group and Rockfire Resources plc, you can compare the effects of market volatilities on Made Tech and Rockfire Resources 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 Made Tech with a short position of Rockfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Made Tech and Rockfire Resources.
Diversification Opportunities for Made Tech and Rockfire Resources
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Made and Rockfire is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Made Tech Group and Rockfire Resources plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockfire Resources plc and Made Tech 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 Made Tech Group are associated (or correlated) with Rockfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockfire Resources plc has no effect on the direction of Made Tech i.e., Made Tech and Rockfire Resources go up and down completely randomly.
Pair Corralation between Made Tech and Rockfire Resources
If you would invest 1,950 in Made Tech Group on September 5, 2024 and sell it today you would earn a total of 450.00 from holding Made Tech Group or generate 23.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Made Tech Group vs. Rockfire Resources plc
Performance |
| Timeline |
| Made Tech Group |
| Rockfire Resources plc |
Made Tech and Rockfire Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Made Tech and Rockfire Resources
The main advantage of trading using opposite Made Tech and Rockfire Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Made Tech position performs unexpectedly, Rockfire Resources 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 Rockfire Resources will offset losses from the drop in Rockfire Resources' long position.| Made Tech vs. Spirent Communications plc | Made Tech vs. Jupiter Fund Management | Made Tech vs. United Internet AG | Made Tech vs. Batm Advanced Communications |
| Rockfire Resources vs. TechnipFMC PLC | Rockfire Resources vs. Made Tech Group | Rockfire Resources vs. Microchip Technology | Rockfire Resources vs. DXC Technology Co |
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.
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