Correlation Between RCM TECHNOLOGIES and PT Indofood
Can any of the company-specific risk be diversified away by investing in both RCM TECHNOLOGIES and PT Indofood 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 RCM TECHNOLOGIES and PT Indofood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM TECHNOLOGIES and PT Indofood Sukses, you can compare the effects of market volatilities on RCM TECHNOLOGIES and PT Indofood 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 RCM TECHNOLOGIES with a short position of PT Indofood. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM TECHNOLOGIES and PT Indofood.
Diversification Opportunities for RCM TECHNOLOGIES and PT Indofood
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between RCM and ISM is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding RCM TECHNOLOGIES and PT Indofood Sukses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PT Indofood Sukses and RCM 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 RCM TECHNOLOGIES are associated (or correlated) with PT Indofood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PT Indofood Sukses has no effect on the direction of RCM TECHNOLOGIES i.e., RCM TECHNOLOGIES and PT Indofood go up and down completely randomly.
Pair Corralation between RCM TECHNOLOGIES and PT Indofood
Assuming the 90 days trading horizon RCM TECHNOLOGIES is expected to generate 0.77 times more return on investment than PT Indofood. However, RCM TECHNOLOGIES is 1.3 times less risky than PT Indofood. It trades about 0.22 of its potential returns per unit of risk. PT Indofood Sukses is currently generating about -0.03 per unit of risk. If you would invest 2,000 in RCM TECHNOLOGIES on September 22, 2024 and sell it today you would earn a total of 160.00 from holding RCM TECHNOLOGIES or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 81.82% |
| Values | Daily Returns |
RCM TECHNOLOGIES vs. PT Indofood Sukses
Performance |
| Timeline |
| RCM TECHNOLOGIES |
| PT Indofood Sukses |
RCM TECHNOLOGIES and PT Indofood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM TECHNOLOGIES and PT Indofood
The main advantage of trading using opposite RCM TECHNOLOGIES and PT Indofood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM TECHNOLOGIES position performs unexpectedly, PT Indofood 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 PT Indofood will offset losses from the drop in PT Indofood's long position.| RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc | RCM TECHNOLOGIES vs. Apple Inc |
| PT Indofood vs. AWILCO DRILLING PLC | PT Indofood vs. Choice Hotels International | PT Indofood vs. Host Hotels Resorts | PT Indofood vs. Xenia Hotels Resorts |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets |