Correlation Between RSL Electronics and Axilion Smart
Can any of the company-specific risk be diversified away by investing in both RSL Electronics and Axilion Smart 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 RSL Electronics and Axilion Smart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RSL Electronics and Axilion Smart Mobility, you can compare the effects of market volatilities on RSL Electronics and Axilion Smart 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 RSL Electronics with a short position of Axilion Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of RSL Electronics and Axilion Smart.
Diversification Opportunities for RSL Electronics and Axilion Smart
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between RSL and Axilion is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding RSL Electronics and Axilion Smart Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axilion Smart Mobility and RSL Electronics 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 RSL Electronics are associated (or correlated) with Axilion Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axilion Smart Mobility has no effect on the direction of RSL Electronics i.e., RSL Electronics and Axilion Smart go up and down completely randomly.
Pair Corralation between RSL Electronics and Axilion Smart
Assuming the 90 days trading horizon RSL Electronics is expected to generate 0.99 times more return on investment than Axilion Smart. However, RSL Electronics is 1.01 times less risky than Axilion Smart. It trades about 0.16 of its potential returns per unit of risk. Axilion Smart Mobility is currently generating about -0.3 per unit of risk. If you would invest 70,500 in RSL Electronics on August 31, 2024 and sell it today you would earn a total of 5,320 from holding RSL Electronics or generate 7.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
RSL Electronics vs. Axilion Smart Mobility
Performance |
| Timeline |
| RSL Electronics |
| Axilion Smart Mobility |
RSL Electronics and Axilion Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RSL Electronics and Axilion Smart
The main advantage of trading using opposite RSL Electronics and Axilion Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RSL Electronics position performs unexpectedly, Axilion Smart 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 Axilion Smart will offset losses from the drop in Axilion Smart's long position.| RSL Electronics vs. Arad | RSL Electronics vs. Alony Hetz Properties | RSL Electronics vs. Danel | RSL Electronics vs. Airport City |
| Axilion Smart vs. MediPress Health Limited Partnership | Axilion Smart vs. Ilex Medical | Axilion Smart vs. RSL Electronics | Axilion Smart vs. Scope Metals Group |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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