Correlation Between RF Acquisition and SCOR PK
Can any of the company-specific risk be diversified away by investing in both RF Acquisition and SCOR PK 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 SCOR PK 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 SCOR PK, you can compare the effects of market volatilities on RF Acquisition and SCOR PK 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 SCOR PK. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Acquisition and SCOR PK.
Diversification Opportunities for RF Acquisition and SCOR PK
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RFACW and SCOR is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding RF Acquisition Corp and SCOR PK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOR PK 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 SCOR PK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOR PK has no effect on the direction of RF Acquisition i.e., RF Acquisition and SCOR PK go up and down completely randomly.
Pair Corralation between RF Acquisition and SCOR PK
Assuming the 90 days horizon RF Acquisition Corp is expected to generate 10.45 times more return on investment than SCOR PK. However, RF Acquisition is 10.45 times more volatile than SCOR PK. It trades about 0.47 of its potential returns per unit of risk. SCOR PK is currently generating about 0.1 per unit of risk. If you would invest 1.25 in RF Acquisition Corp on October 24, 2024 and sell it today you would earn a total of 4.75 from holding RF Acquisition Corp or generate 380.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 83.33% |
| Values | Daily Returns |
RF Acquisition Corp vs. SCOR PK
Performance |
| Timeline |
| RF Acquisition Corp |
| SCOR PK |
RF Acquisition and SCOR PK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Acquisition and SCOR PK
The main advantage of trading using opposite RF Acquisition and SCOR PK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Acquisition position performs unexpectedly, SCOR PK 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 SCOR PK will offset losses from the drop in SCOR PK's long position.| RF Acquisition vs. Visa Class A | RF Acquisition vs. Diamond Hill Investment | RF Acquisition vs. Distoken Acquisition | RF Acquisition vs. AllianceBernstein Holding LP |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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