Correlation Between RCM Technologies and Stamper Oil
Can any of the company-specific risk be diversified away by investing in both RCM Technologies and Stamper Oil 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 Stamper Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RCM Technologies and Stamper Oil Gas, you can compare the effects of market volatilities on RCM Technologies and Stamper Oil 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 Stamper Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of RCM Technologies and Stamper Oil.
Diversification Opportunities for RCM Technologies and Stamper Oil
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RCM and Stamper is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding RCM Technologies and Stamper Oil Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stamper Oil Gas 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 Stamper Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stamper Oil Gas has no effect on the direction of RCM Technologies i.e., RCM Technologies and Stamper Oil go up and down completely randomly.
Pair Corralation between RCM Technologies and Stamper Oil
Given the investment horizon of 90 days RCM Technologies is expected to generate 28.62 times less return on investment than Stamper Oil. But when comparing it to its historical volatility, RCM Technologies is 21.82 times less risky than Stamper Oil. It trades about 0.05 of its potential returns per unit of risk. Stamper Oil Gas is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 23.00 in Stamper Oil Gas on September 26, 2024 and sell it today you would lose (22.00) from holding Stamper Oil Gas or give up 95.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
RCM Technologies vs. Stamper Oil Gas
Performance |
| Timeline |
| RCM Technologies |
| Stamper Oil Gas |
RCM Technologies and Stamper Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RCM Technologies and Stamper Oil
The main advantage of trading using opposite RCM Technologies and Stamper Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RCM Technologies position performs unexpectedly, Stamper Oil 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 Stamper Oil will offset losses from the drop in Stamper Oil's long position.| RCM Technologies vs. Matthews International | RCM Technologies vs. Mammoth Energy Services | RCM Technologies vs. Griffon | RCM Technologies vs. Steel Partners Holdings |
| Stamper Oil vs. East West Petroleum | Stamper Oil vs. Valeura Energy | Stamper Oil vs. Invictus Energy Limited | Stamper Oil vs. Africa Oil Corp |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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