Correlation Between RF Industries and Signify NV
Can any of the company-specific risk be diversified away by investing in both RF Industries and Signify NV 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 Signify NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Industries and Signify NV, you can compare the effects of market volatilities on RF Industries and Signify NV 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 Signify NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Industries and Signify NV.
Diversification Opportunities for RF Industries and Signify NV
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between RFIL and Signify is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding RF Industries and Signify NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Signify NV 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 Signify NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Signify NV has no effect on the direction of RF Industries i.e., RF Industries and Signify NV go up and down completely randomly.
Pair Corralation between RF Industries and Signify NV
Given the investment horizon of 90 days RF Industries is expected to under-perform the Signify NV. But the stock apears to be less risky and, when comparing its historical volatility, RF Industries is 1.73 times less risky than Signify NV. The stock trades about -0.01 of its potential returns per unit of risk. The Signify NV is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,582 in Signify NV on August 28, 2024 and sell it today you would lose (432.00) from holding Signify NV or give up 27.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 80.67% |
| Values | Daily Returns |
RF Industries vs. Signify NV
Performance |
| Timeline |
| RF Industries |
| Signify NV |
RF Industries and Signify NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Industries and Signify NV
The main advantage of trading using opposite RF Industries and Signify NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Industries position performs unexpectedly, Signify NV 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 Signify NV will offset losses from the drop in Signify NV's long position.| RF Industries vs. Nortech Systems Incorporated | RF Industries vs. Richardson Electronics | RF Industries vs. AstroNova |
| Signify NV vs. FREYR Battery SA | Signify NV vs. nVent Electric PLC | Signify NV vs. Hubbell | Signify NV vs. Advanced Energy Industries |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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