Correlation Between 00108WAF7 and RCM Technologies
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By analyzing existing cross correlation between AEP TEX INC and RCM Technologies, you can compare the effects of market volatilities on 00108WAF7 and RCM Technologies 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 00108WAF7 with a short position of RCM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of 00108WAF7 and RCM Technologies.
Diversification Opportunities for 00108WAF7 and RCM Technologies
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 00108WAF7 and RCM is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding AEP TEX INC and RCM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM Technologies and 00108WAF7 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 AEP TEX INC are associated (or correlated) with RCM Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RCM Technologies has no effect on the direction of 00108WAF7 i.e., 00108WAF7 and RCM Technologies go up and down completely randomly.
Pair Corralation between 00108WAF7 and RCM Technologies
Assuming the 90 days trading horizon AEP TEX INC is expected to generate 2.4 times more return on investment than RCM Technologies. However, 00108WAF7 is 2.4 times more volatile than RCM Technologies. It trades about 0.04 of its potential returns per unit of risk. RCM Technologies is currently generating about -0.38 per unit of risk. If you would invest 7,599 in AEP TEX INC on October 10, 2024 and sell it today you would earn a total of 69.00 from holding AEP TEX INC or generate 0.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 61.9% |
| Values | Daily Returns |
AEP TEX INC vs. RCM Technologies
Performance |
| Timeline |
| AEP TEX INC |
| RCM Technologies |
00108WAF7 and RCM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 00108WAF7 and RCM Technologies
The main advantage of trading using opposite 00108WAF7 and RCM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 00108WAF7 position performs unexpectedly, RCM Technologies 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 RCM Technologies will offset losses from the drop in RCM Technologies' long position.| 00108WAF7 vs. RLJ Lodging Trust | 00108WAF7 vs. Citigroup | 00108WAF7 vs. SEI Investments | 00108WAF7 vs. SM Investments |
| RCM Technologies vs. Matthews International | RCM Technologies vs. Mammoth Energy Services | RCM Technologies vs. Griffon | RCM Technologies vs. Steel Partners Holdings |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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