Correlation Between RPCG Public and Rockworth Public
Can any of the company-specific risk be diversified away by investing in both RPCG Public and Rockworth Public 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 RPCG Public and Rockworth Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RPCG Public and Rockworth Public, you can compare the effects of market volatilities on RPCG Public and Rockworth Public 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 RPCG Public with a short position of Rockworth Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of RPCG Public and Rockworth Public.
Diversification Opportunities for RPCG Public and Rockworth Public
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RPCG and Rockworth is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding RPCG Public and Rockworth Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rockworth Public and RPCG Public 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 RPCG Public are associated (or correlated) with Rockworth Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rockworth Public has no effect on the direction of RPCG Public i.e., RPCG Public and Rockworth Public go up and down completely randomly.
Pair Corralation between RPCG Public and Rockworth Public
Assuming the 90 days trading horizon RPCG Public is expected to generate 1.09 times less return on investment than Rockworth Public. But when comparing it to its historical volatility, RPCG Public is 1.0 times less risky than Rockworth Public. It trades about 0.06 of its potential returns per unit of risk. Rockworth Public is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 770.00 in Rockworth Public on September 3, 2024 and sell it today you would earn a total of 330.00 from holding Rockworth Public or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RPCG Public vs. Rockworth Public
Performance |
| Timeline |
| RPCG Public |
| Rockworth Public |
RPCG Public and Rockworth Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RPCG Public and Rockworth Public
The main advantage of trading using opposite RPCG Public and Rockworth Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RPCG Public position performs unexpectedly, Rockworth Public 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 Rockworth Public will offset losses from the drop in Rockworth Public's long position.| RPCG Public vs. Interlink Communication Public | RPCG Public vs. Asia Medical Agricultural | RPCG Public vs. Syntec Construction Public | RPCG Public vs. Bualuang Office Leasehold |
| Rockworth Public vs. Ocean Glass Public | Rockworth Public vs. Siam Steel International | Rockworth Public vs. Peoples Garment Public | Rockworth Public vs. RPCG Public |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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