Correlation Between Atinum Investment and RFTech

Can any of the company-specific risk be diversified away by investing in both Atinum Investment and RFTech 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 Atinum Investment and RFTech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Atinum Investment Co and RFTech Co, you can compare the effects of market volatilities on Atinum Investment and RFTech 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 Atinum Investment with a short position of RFTech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atinum Investment and RFTech.

Diversification Opportunities for Atinum Investment and RFTech

-0.4

Correlation Coefficient

Atinum Investment  RFTech

Very good diversification

The 3 months correlation between Atinum and RFTech is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Atinum Investment Co and RFTech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RFTech and Atinum Investment 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 Atinum Investment Co are associated (or correlated) with RFTech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RFTech has no effect on the direction of Atinum Investment i.e., Atinum Investment and RFTech go up and down completely randomly.

Pair Corralation between Atinum Investment and RFTech

Assuming the 90 days trading horizon Atinum Investment Co is expected to under-perform the RFTech. In addition to that, Atinum Investment is 1.19 times more volatile than RFTech Co. It trades about -0.01 of its total potential returns per unit of risk. RFTech Co is currently generating about 0.13 per unit of volatility. If you would invest  319,000  in RFTech Co on September 12, 2024 and sell it today you would earn a total of  59,500  from holding RFTech Co or generate 18.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Atinum Investment Co  vs.  RFTech Co

Atinum Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atinum Investment Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Atinum Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

RFTech

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RFTech Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, RFTech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Atinum Investment and RFTech

The main advantage of trading using opposite Atinum Investment and RFTech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atinum Investment position performs unexpectedly, RFTech 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 RFTech will offset losses from the drop in RFTech's long position.

The idea behind Atinum Investment Co and RFTech Co pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Global Correlations module to find global opportunities by holding instruments from different markets.