Correlation Between RF Industries and Eshallgo
Can any of the company-specific risk be diversified away by investing in both RF Industries and Eshallgo 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 Industries and Eshallgo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Industries and Eshallgo Class A, you can compare the effects of market volatilities on RF Industries and Eshallgo 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 Industries with a short position of Eshallgo. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Industries and Eshallgo.
Diversification Opportunities for RF Industries and Eshallgo
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between RFIL and Eshallgo is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding RF Industries and Eshallgo Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eshallgo Class A and RF Industries 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 Industries are associated (or correlated) with Eshallgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eshallgo Class A has no effect on the direction of RF Industries i.e., RF Industries and Eshallgo go up and down completely randomly.
Pair Corralation between RF Industries and Eshallgo
Given the investment horizon of 90 days RF Industries is expected to generate 0.35 times more return on investment than Eshallgo. However, RF Industries is 2.83 times less risky than Eshallgo. It trades about 0.36 of its potential returns per unit of risk. Eshallgo Class A is currently generating about -0.28 per unit of risk. If you would invest 387.00 in RF Industries on November 8, 2024 and sell it today you would earn a total of 163.00 from holding RF Industries or generate 42.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RF Industries vs. Eshallgo Class A
Performance |
| Timeline |
| RF Industries |
| Eshallgo Class A |
RF Industries and Eshallgo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Industries and Eshallgo
The main advantage of trading using opposite RF Industries and Eshallgo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Industries position performs unexpectedly, Eshallgo 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 Eshallgo will offset losses from the drop in Eshallgo's long position.| RF Industries vs. Nortech Systems Incorporated | RF Industries vs. Richardson Electronics | RF Industries vs. AstroNova |
| Eshallgo vs. Methode Electronics | Eshallgo vs. OSI Systems | Eshallgo vs. Bel Fuse A | Eshallgo vs. Richardson Electronics |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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