Correlation Between Research Frontiers and Corning Incorporated

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

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

Diversification Opportunities for Research Frontiers and Corning Incorporated

0.54

Correlation Coefficient

Research Frontiers  Corning Incorporated

Very weak diversification

The 3 months correlation between Research and Corning is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Research Frontiers Incorporate and Corning Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corning Incorporated and Research Frontiers 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 Research Frontiers Incorporated are associated (or correlated) with Corning Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corning Incorporated has no effect on the direction of Research Frontiers i.e., Research Frontiers and Corning Incorporated go up and down completely randomly.

Pair Corralation between Research Frontiers and Corning Incorporated

Given the investment horizon of 90 days Research Frontiers Incorporated is expected to generate 4.33 times more return on investment than Corning Incorporated. However, Research Frontiers is 4.33 times more volatile than Corning Incorporated. It trades about 0.22 of its potential returns per unit of risk. Corning Incorporated is currently generating about 0.14 per unit of risk. If you would invest  102.00  in Research Frontiers Incorporated on February 20, 2024 and sell it today you would earn a total of  90.00  from holding Research Frontiers Incorporated or generate 88.24% return on investment over 90 days.

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

Research Frontiers Incorporate  vs.  Corning Incorporated

Research Frontiers

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Research Frontiers Incorporated are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Research Frontiers reported solid returns over the last few months and may actually be approaching a breakup point.

Corning Incorporated

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Corning Incorporated are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain essential indicators, Corning Incorporated may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Research Frontiers and Corning Incorporated

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

The idea behind Research Frontiers Incorporated and Corning Incorporated 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..