Correlation Between RCM Technologies and ConnectOne Bancorp
Can any of the company-specific risk be diversified away by investing in both RCM Technologies and ConnectOne Bancorp 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 ConnectOne Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM Technologies and ConnectOne Bancorp, you can compare the effects of market volatilities on RCM Technologies and ConnectOne Bancorp 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 ConnectOne Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM Technologies and ConnectOne Bancorp.
Diversification Opportunities for RCM Technologies and ConnectOne Bancorp
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RCM and ConnectOne is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding RCM Technologies and ConnectOne Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ConnectOne Bancorp 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 ConnectOne Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ConnectOne Bancorp has no effect on the direction of RCM Technologies i.e., RCM Technologies and ConnectOne Bancorp go up and down completely randomly.
Pair Corralation between RCM Technologies and ConnectOne Bancorp
Given the investment horizon of 90 days RCM Technologies is expected to under-perform the ConnectOne Bancorp. In addition to that, RCM Technologies is 6.35 times more volatile than ConnectOne Bancorp. It trades about -0.01 of its total potential returns per unit of risk. ConnectOne Bancorp is currently generating about 0.08 per unit of volatility. If you would invest 2,220 in ConnectOne Bancorp on September 28, 2024 and sell it today you would earn a total of 10.00 from holding ConnectOne Bancorp or generate 0.45% 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. ConnectOne Bancorp
Performance |
| Timeline |
| RCM Technologies |
| ConnectOne Bancorp |
RCM Technologies and ConnectOne Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM Technologies and ConnectOne Bancorp
The main advantage of trading using opposite RCM Technologies and ConnectOne Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM Technologies position performs unexpectedly, ConnectOne Bancorp 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 ConnectOne Bancorp will offset losses from the drop in ConnectOne Bancorp's long position.| RCM Technologies vs. Matthews International | RCM Technologies vs. Mammoth Energy Services | RCM Technologies vs. Griffon | RCM Technologies vs. Steel Partners Holdings |
| ConnectOne Bancorp vs. Dime Community Bancshares | ConnectOne Bancorp vs. Washington Federal | ConnectOne Bancorp vs. CNB Financial | ConnectOne Bancorp vs. First Guaranty Bancshares |
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 CEOs Directory module to screen CEOs from public companies around the world.
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