Correlation Between Research Frontiers and Neonode
Can any of the company-specific risk be diversified away by investing in both Research Frontiers and Neonode 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 Research Frontiers and Neonode into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Research Frontiers Incorporated and Neonode, you can compare the effects of market volatilities on Research Frontiers and Neonode 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 Research Frontiers with a short position of Neonode. Check out your portfolio center. Please also check ongoing floating volatility patterns of Research Frontiers and Neonode.
Diversification Opportunities for Research Frontiers and Neonode
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Research and Neonode is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Research Frontiers Incorporate and Neonode in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neonode and Research Frontiers 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 Research Frontiers Incorporated are associated (or correlated) with Neonode. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neonode has no effect on the direction of Research Frontiers i.e., Research Frontiers and Neonode go up and down completely randomly.
Pair Corralation between Research Frontiers and Neonode
Given the investment horizon of 90 days Research Frontiers Incorporated is expected to under-perform the Neonode. But the stock apears to be less risky and, when comparing its historical volatility, Research Frontiers Incorporated is 2.58 times less risky than Neonode. The stock trades about -0.02 of its potential returns per unit of risk. The Neonode is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 308.00 in Neonode on October 26, 2024 and sell it today you would earn a total of 555.00 from holding Neonode or generate 180.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Research Frontiers Incorporate vs. Neonode
Performance |
| Timeline |
| Research Frontiers |
| Neonode |
Research Frontiers and Neonode Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Research Frontiers and Neonode
The main advantage of trading using opposite Research Frontiers and Neonode positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Research Frontiers position performs unexpectedly, Neonode 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 Neonode will offset losses from the drop in Neonode's long position.| Research Frontiers vs. Rigetti Computing | Research Frontiers vs. IONQ WT | Research Frontiers vs. Arqit Quantum Warrants | Research Frontiers vs. QBTS WT |
| Neonode vs. LightPath Technologies | Neonode vs. Methode Electronics | Neonode vs. OSI Systems | Neonode vs. Plexus 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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