Correlation Between RCM Technologies and NN
Can any of the company-specific risk be diversified away by investing in both RCM Technologies and NN 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 NN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM Technologies and NN Inc, you can compare the effects of market volatilities on RCM Technologies and NN 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 NN. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM Technologies and NN.
Diversification Opportunities for RCM Technologies and NN
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between RCM and NN is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding RCM Technologies and NN Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NN Inc 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 NN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NN Inc has no effect on the direction of RCM Technologies i.e., RCM Technologies and NN go up and down completely randomly.
Pair Corralation between RCM Technologies and NN
Given the investment horizon of 90 days RCM Technologies is expected to generate 0.56 times more return on investment than NN. However, RCM Technologies is 1.78 times less risky than NN. It trades about 0.05 of its potential returns per unit of risk. NN Inc is currently generating about -0.02 per unit of risk. If you would invest 2,100 in RCM Technologies on August 24, 2024 and sell it today you would earn a total of 53.00 from holding RCM Technologies or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
RCM Technologies vs. NN Inc
Performance |
| Timeline |
| RCM Technologies |
| NN Inc |
RCM Technologies and NN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM Technologies and NN
The main advantage of trading using opposite RCM Technologies and NN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM Technologies position performs unexpectedly, NN 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 NN will offset losses from the drop in NN's long position.| RCM Technologies vs. Steel Partners Holdings | RCM Technologies vs. FTAI Infrastructure | RCM Technologies vs. Griffon | RCM Technologies vs. Matthews International |
| NN vs. Steel Partners Holdings | NN vs. Compass Diversified | NN vs. Brookfield Business Partners | NN vs. Matthews International |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |