Correlation Between Swift Foods and RFM Corp
Can any of the company-specific risk be diversified away by investing in both Swift Foods and RFM Corp 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 Swift Foods and RFM Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swift Foods and RFM Corp, you can compare the effects of market volatilities on Swift Foods and RFM Corp 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 Swift Foods with a short position of RFM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swift Foods and RFM Corp.
Diversification Opportunities for Swift Foods and RFM Corp
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swift and RFM is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Swift Foods and RFM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFM Corp and Swift Foods 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 Swift Foods are associated (or correlated) with RFM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFM Corp has no effect on the direction of Swift Foods i.e., Swift Foods and RFM Corp go up and down completely randomly.
Pair Corralation between Swift Foods and RFM Corp
Assuming the 90 days trading horizon Swift Foods is expected to generate 2.46 times less return on investment than RFM Corp. In addition to that, Swift Foods is 2.77 times more volatile than RFM Corp. It trades about 0.0 of its total potential returns per unit of risk. RFM Corp is currently generating about 0.03 per unit of volatility. If you would invest 311.00 in RFM Corp on August 30, 2024 and sell it today you would earn a total of 69.00 from holding RFM Corp or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.04% |
| Values | Daily Returns |
Swift Foods vs. RFM Corp
Performance |
| Timeline |
| Swift Foods |
| RFM Corp |
Swift Foods and RFM Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swift Foods and RFM Corp
The main advantage of trading using opposite Swift Foods and RFM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swift Foods position performs unexpectedly, RFM Corp 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 RFM Corp will offset losses from the drop in RFM Corp's long position.| Swift Foods vs. Integrated Micro Electronics | Swift Foods vs. Semirara Mining Corp | Swift Foods vs. Robinsons Retail Holdings | Swift Foods vs. Philex Mining Corp |
| RFM Corp vs. Swift Foods | RFM Corp vs. Allhome Corp | RFM Corp vs. Jollibee Foods Corp | RFM Corp vs. LFM Properties Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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