Correlation Between RCM Technologies and Equifax
Can any of the company-specific risk be diversified away by investing in both RCM Technologies and Equifax 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 Equifax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM Technologies and Equifax, you can compare the effects of market volatilities on RCM Technologies and Equifax 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 Equifax. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM Technologies and Equifax.
Diversification Opportunities for RCM Technologies and Equifax
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between RCM and Equifax is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding RCM Technologies and Equifax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equifax 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 Equifax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equifax has no effect on the direction of RCM Technologies i.e., RCM Technologies and Equifax go up and down completely randomly.
Pair Corralation between RCM Technologies and Equifax
Given the investment horizon of 90 days RCM Technologies is expected to generate 1.58 times more return on investment than Equifax. However, RCM Technologies is 1.58 times more volatile than Equifax. It trades about 0.06 of its potential returns per unit of risk. Equifax is currently generating about 0.05 per unit of risk. If you would invest 1,165 in RCM Technologies on September 13, 2024 and sell it today you would earn a total of 1,156 from holding RCM Technologies or generate 99.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
RCM Technologies vs. Equifax
Performance |
| Timeline |
| RCM Technologies |
| Equifax |
RCM Technologies and Equifax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM Technologies and Equifax
The main advantage of trading using opposite RCM Technologies and Equifax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM Technologies position performs unexpectedly, Equifax 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 Equifax will offset losses from the drop in Equifax's long position.| RCM Technologies vs. Matthews International | RCM Technologies vs. Mammoth Energy Services | RCM Technologies vs. Griffon | RCM Technologies vs. Steel Partners Holdings |
| Equifax vs. Verisk Analytics | Equifax vs. Exponent | Equifax vs. FTI Consulting | Equifax vs. Franklin Covey |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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