Correlation Between RSL Electronics and C Mer
Can any of the company-specific risk be diversified away by investing in both RSL Electronics and C Mer 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 C Mer into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RSL Electronics and C Mer Industries, you can compare the effects of market volatilities on RSL Electronics and C Mer 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 C Mer. Check out your portfolio center. Please also check ongoing floating volatility patterns of RSL Electronics and C Mer.
Diversification Opportunities for RSL Electronics and C Mer
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RSL and CMER is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding RSL Electronics and C Mer Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on C Mer Industries 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 C Mer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of C Mer Industries has no effect on the direction of RSL Electronics i.e., RSL Electronics and C Mer go up and down completely randomly.
Pair Corralation between RSL Electronics and C Mer
Assuming the 90 days trading horizon RSL Electronics is expected to generate 1.5 times less return on investment than C Mer. But when comparing it to its historical volatility, RSL Electronics is 1.97 times less risky than C Mer. It trades about 0.29 of its potential returns per unit of risk. C Mer Industries is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 219,000 in C Mer Industries on September 13, 2024 and sell it today you would earn a total of 49,700 from holding C Mer Industries or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
RSL Electronics vs. C Mer Industries
Performance |
| Timeline |
| RSL Electronics |
| C Mer Industries |
RSL Electronics and C Mer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RSL Electronics and C Mer
The main advantage of trading using opposite RSL Electronics and C Mer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RSL Electronics position performs unexpectedly, C Mer 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 C Mer will offset losses from the drop in C Mer's long position.| RSL Electronics vs. Aran Research and | RSL Electronics vs. Al Bad Massuot Yitzhak | RSL Electronics vs. Analyst IMS Investment | RSL Electronics vs. Golan Plastic |
| C Mer vs. Analyst IMS Investment | C Mer vs. Millennium Food Tech LP | C Mer vs. Adgar Investments and | C Mer vs. MEITAV INVESTMENTS HOUSE |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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