Correlation Between RF Industries and RCM Technologies
Can any of the company-specific risk be diversified away by investing in both RF Industries and RCM Technologies 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 RCM Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RF Industries and RCM Technologies, you can compare the effects of market volatilities on RF Industries 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 RF Industries with a short position of RCM Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of RF Industries and RCM Technologies.
Diversification Opportunities for RF Industries and RCM Technologies
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between RFIL and RCM is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding RF Industries and RCM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM Technologies 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 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 RF Industries i.e., RF Industries and RCM Technologies go up and down completely randomly.
Pair Corralation between RF Industries and RCM Technologies
Given the investment horizon of 90 days RF Industries is expected to generate 2.44 times more return on investment than RCM Technologies. However, RF Industries is 2.44 times more volatile than RCM Technologies. It trades about 0.2 of its potential returns per unit of risk. RCM Technologies is currently generating about 0.14 per unit of risk. If you would invest 412.00 in RF Industries on June 11, 2025 and sell it today you would earn a total of 320.00 from holding RF Industries or generate 77.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RF Industries vs. RCM Technologies
Performance |
| Timeline |
| RF Industries |
| RCM Technologies |
RF Industries and RCM Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RF Industries and RCM Technologies
The main advantage of trading using opposite RF Industries and RCM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RF Industries 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.| RF Industries vs. Flux Power Holdings | RF Industries vs. GrafTech International | RF Industries vs. Advanced Energy Industries | RF Industries vs. Pioneer Power Solutions |
| RCM Technologies vs. FTAI Infrastructure | RCM Technologies vs. Seaboard | RCM Technologies vs. Mammoth Energy Services | RCM Technologies vs. Willis Lease Finance |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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