Correlation Between RF Industries and Celestica
Can any of the company-specific risk be diversified away by investing in both RF Industries and Celestica 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 RF Industries and Celestica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Industries and Celestica, you can compare the effects of market volatilities on RF Industries and Celestica 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 RF Industries with a short position of Celestica. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Industries and Celestica.
Diversification Opportunities for RF Industries and Celestica
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RFIL and Celestica is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding RF Industries and Celestica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celestica and RF Industries 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 RF Industries are associated (or correlated) with Celestica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celestica has no effect on the direction of RF Industries i.e., RF Industries and Celestica go up and down completely randomly.
Pair Corralation between RF Industries and Celestica
Given the investment horizon of 90 days RF Industries is expected to generate 2.03 times less return on investment than Celestica. But when comparing it to its historical volatility, RF Industries is 2.05 times less risky than Celestica. It trades about 0.09 of its potential returns per unit of risk. Celestica is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,705 in Celestica on March 10, 2024 and sell it today you would earn a total of 520.00 from holding Celestica or generate 11.05% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
RF Industries vs. Celestica
Performance |
Timeline |
RF Industries |
Celestica |
RF Industries and Celestica Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with RF Industries and Celestica
The main advantage of trading using opposite RF Industries and Celestica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Industries position performs unexpectedly, Celestica 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 Celestica will offset losses from the drop in Celestica's long position.RF Industries vs. Mynaric AG ADR | RF Industries vs. Comtech Telecommunications Corp | RF Industries vs. Ituran Location and | RF Industries vs. Aviat Networks |
Celestica vs. Mynaric AG ADR | Celestica vs. Comtech Telecommunications Corp | Celestica vs. Ituran Location and | Celestica vs. Aviat Networks |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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