Correlation Between RCM TECHNOLOGIES and SPECTRAL MEDICAL
Can any of the company-specific risk be diversified away by investing in both RCM TECHNOLOGIES and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM TECHNOLOGIES and SPECTRAL MEDICAL, you can compare the effects of market volatilities on RCM TECHNOLOGIES and SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM TECHNOLOGIES and SPECTRAL MEDICAL.
Diversification Opportunities for RCM TECHNOLOGIES and SPECTRAL MEDICAL
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RCM and SPECTRAL is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding RCM TECHNOLOGIES and SPECTRAL MEDICAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPECTRAL MEDICAL 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 SPECTRAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPECTRAL MEDICAL has no effect on the direction of RCM TECHNOLOGIES i.e., RCM TECHNOLOGIES and SPECTRAL MEDICAL go up and down completely randomly.
Pair Corralation between RCM TECHNOLOGIES and SPECTRAL MEDICAL
Assuming the 90 days trading horizon RCM TECHNOLOGIES is expected to under-perform the SPECTRAL MEDICAL. But the stock apears to be less risky and, when comparing its historical volatility, RCM TECHNOLOGIES is 2.58 times less risky than SPECTRAL MEDICAL. The stock trades about -0.48 of its potential returns per unit of risk. The SPECTRAL MEDICAL is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 34.00 in SPECTRAL MEDICAL on October 11, 2024 and sell it today you would earn a total of 3.00 from holding SPECTRAL MEDICAL or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 27.78% |
| Values | Daily Returns |
RCM TECHNOLOGIES vs. SPECTRAL MEDICAL
Performance |
| Timeline |
| RCM TECHNOLOGIES |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| SPECTRAL MEDICAL |
RCM TECHNOLOGIES and SPECTRAL MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM TECHNOLOGIES and SPECTRAL MEDICAL
The main advantage of trading using opposite RCM TECHNOLOGIES and SPECTRAL MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM TECHNOLOGIES position performs unexpectedly, SPECTRAL MEDICAL 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 SPECTRAL MEDICAL will offset losses from the drop in SPECTRAL MEDICAL's long position.| RCM TECHNOLOGIES vs. CANON MARKETING JP | RCM TECHNOLOGIES vs. Auto Trader Group | RCM TECHNOLOGIES vs. SIDETRADE EO 1 | RCM TECHNOLOGIES vs. Tradegate AG Wertpapierhandelsbank |
| SPECTRAL MEDICAL vs. Thermo Fisher Scientific | SPECTRAL MEDICAL vs. Danaher | SPECTRAL MEDICAL vs. Siemens Healthineers AG | SPECTRAL MEDICAL vs. Agilent Technologies |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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