Correlation Between Radiant Globaltech and Versatile Creative

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

By analyzing existing cross correlation between Radiant Globaltech Bhd and Versatile Creative Bhd, you can compare the effects of market volatilities on Radiant Globaltech and Versatile Creative 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 Radiant Globaltech with a short position of Versatile Creative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Radiant Globaltech and Versatile Creative.

Diversification Opportunities for Radiant Globaltech and Versatile Creative

-0.23

Correlation Coefficient

Radiant Globaltech  Versatile Creative

Very good diversification

The 3 months correlation between Radiant and Versatile is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Radiant Globaltech Bhd and Versatile Creative Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Versatile Creative Bhd and Radiant Globaltech 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 Radiant Globaltech Bhd are associated (or correlated) with Versatile Creative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Versatile Creative Bhd has no effect on the direction of Radiant Globaltech i.e., Radiant Globaltech and Versatile Creative go up and down completely randomly.

Pair Corralation between Radiant Globaltech and Versatile Creative

Assuming the 90 days trading horizon Radiant Globaltech Bhd is expected to generate 1.38 times more return on investment than Versatile Creative. However, Radiant Globaltech is 1.38 times more volatile than Versatile Creative Bhd. It trades about 0.03 of its potential returns per unit of risk. Versatile Creative Bhd is currently generating about 0.04 per unit of risk. If you would invest  31.00  in Radiant Globaltech Bhd on October 5, 2024 and sell it today you would earn a total of  4.00  from holding Radiant Globaltech Bhd or generate 12.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.34%
Values	Daily Returns

Radiant Globaltech Bhd  vs.  Versatile Creative Bhd

Radiant Globaltech Bhd

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Radiant Globaltech Bhd are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Radiant Globaltech may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Versatile Creative Bhd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Versatile Creative Bhd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Versatile Creative is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Radiant Globaltech and Versatile Creative

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

The idea behind Radiant Globaltech Bhd and Versatile Creative Bhd 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.

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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 CEOs Directory module to screen CEOs from public companies around the world.