Correlation Between Roku and StockRate Invest
Can any of the company-specific risk be diversified away by investing in both Roku and StockRate Invest 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 Roku and StockRate Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roku Inc and StockRate Invest , you can compare the effects of market volatilities on Roku and StockRate Invest 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 Roku with a short position of StockRate Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roku and StockRate Invest.
Diversification Opportunities for Roku and StockRate Invest
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Roku and StockRate is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Roku Inc and StockRate Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StockRate Invest and Roku 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 Roku Inc are associated (or correlated) with StockRate Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StockRate Invest has no effect on the direction of Roku i.e., Roku and StockRate Invest go up and down completely randomly.
Pair Corralation between Roku and StockRate Invest
Given the investment horizon of 90 days Roku is expected to generate 2.25 times less return on investment than StockRate Invest. In addition to that, Roku is 5.26 times more volatile than StockRate Invest . It trades about 0.0 of its total potential returns per unit of risk. StockRate Invest is currently generating about 0.03 per unit of volatility. If you would invest 23,816 in StockRate Invest on February 7, 2024 and sell it today you would earn a total of 2,911 from holding StockRate Invest or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Roku Inc vs. StockRate Invest
Performance |
| Timeline |
| Roku Inc |
| StockRate Invest |
Roku and StockRate Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roku and StockRate Invest
The main advantage of trading using opposite Roku and StockRate Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roku position performs unexpectedly, StockRate Invest 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 StockRate Invest will offset losses from the drop in StockRate Invest's long position.The idea behind Roku Inc and StockRate Invest 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.| StockRate Invest vs. Novo Nordisk AS | StockRate Invest vs. Nordea Bank Abp | StockRate Invest vs. DSV Panalpina AS | StockRate Invest vs. AP Mller |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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