Correlation Between RF Acquisition and Feutune Light
Can any of the company-specific risk be diversified away by investing in both RF Acquisition and Feutune Light 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 RF Acquisition and Feutune Light into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Acquisition Corp and Feutune Light Acquisition, you can compare the effects of market volatilities on RF Acquisition and Feutune Light 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 RF Acquisition with a short position of Feutune Light. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Acquisition and Feutune Light.
Diversification Opportunities for RF Acquisition and Feutune Light
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between RFACW and Feutune is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding RF Acquisition Corp and Feutune Light Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Feutune Light Acquisition and RF Acquisition 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 RF Acquisition Corp are associated (or correlated) with Feutune Light. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Feutune Light Acquisition has no effect on the direction of RF Acquisition i.e., RF Acquisition and Feutune Light go up and down completely randomly.
Pair Corralation between RF Acquisition and Feutune Light
Assuming the 90 days horizon RF Acquisition Corp is expected to generate 2.33 times more return on investment than Feutune Light. However, RF Acquisition is 2.33 times more volatile than Feutune Light Acquisition. It trades about 0.19 of its potential returns per unit of risk. Feutune Light Acquisition is currently generating about 0.09 per unit of risk. If you would invest 1.06 in RF Acquisition Corp on September 13, 2024 and sell it today you would earn a total of 1.38 from holding RF Acquisition Corp or generate 130.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 84.07% |
| Values | Daily Returns |
RF Acquisition Corp vs. Feutune Light Acquisition
Performance |
| Timeline |
| RF Acquisition Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Feutune Light Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
RF Acquisition and Feutune Light Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Acquisition and Feutune Light
The main advantage of trading using opposite RF Acquisition and Feutune Light positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Acquisition position performs unexpectedly, Feutune Light 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 Feutune Light will offset losses from the drop in Feutune Light's long position.The idea behind RF Acquisition Corp and Feutune Light Acquisition pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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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