Correlation Between RCM TECHNOLOGIES and Pick N
Can any of the company-specific risk be diversified away by investing in both RCM TECHNOLOGIES and Pick N 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 Pick N into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM TECHNOLOGIES and Pick n Pay, you can compare the effects of market volatilities on RCM TECHNOLOGIES and Pick N 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 Pick N. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM TECHNOLOGIES and Pick N.
Diversification Opportunities for RCM TECHNOLOGIES and Pick N
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCM and Pick is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding RCM TECHNOLOGIES and Pick n Pay in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pick n Pay 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 Pick N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pick n Pay has no effect on the direction of RCM TECHNOLOGIES i.e., RCM TECHNOLOGIES and Pick N go up and down completely randomly.
Pair Corralation between RCM TECHNOLOGIES and Pick N
Assuming the 90 days trading horizon RCM TECHNOLOGIES is expected to generate 38.41 times less return on investment than Pick N. But when comparing it to its historical volatility, RCM TECHNOLOGIES is 1.17 times less risky than Pick N. It trades about 0.0 of its potential returns per unit of risk. Pick n Pay is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 107.00 in Pick n Pay on September 3, 2024 and sell it today you would earn a total of 48.00 from holding Pick n Pay or generate 44.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RCM TECHNOLOGIES vs. Pick n Pay
Performance |
| Timeline |
| RCM TECHNOLOGIES |
| Pick n Pay |
RCM TECHNOLOGIES and Pick N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM TECHNOLOGIES and Pick N
The main advantage of trading using opposite RCM TECHNOLOGIES and Pick N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM TECHNOLOGIES position performs unexpectedly, Pick N 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 Pick N will offset losses from the drop in Pick N's long position.| RCM TECHNOLOGIES vs. Compugroup Medical SE | RCM TECHNOLOGIES vs. CVR Medical Corp | RCM TECHNOLOGIES vs. MEDICAL FACILITIES NEW | RCM TECHNOLOGIES vs. KENEDIX OFFICE INV |
| Pick N vs. AIR PRODCHEMICALS | Pick N vs. ELECTRONIC ARTS | Pick N vs. Meiko Electronics Co | Pick N vs. Methode Electronics |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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