Correlation Between RFTech and Dgb Financial

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

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

Diversification Opportunities for RFTech and Dgb Financial

-0.61

Correlation Coefficient

RFTech  Dgb Financial

Excellent diversification

The 3 months correlation between RFTech and Dgb is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and Dgb Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dgb Financial and RFTech 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 RFTech Co are associated (or correlated) with Dgb Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dgb Financial has no effect on the direction of RFTech i.e., RFTech and Dgb Financial go up and down completely randomly.

Pair Corralation between RFTech and Dgb Financial

Assuming the 90 days trading horizon RFTech Co is expected to under-perform the Dgb Financial. In addition to that, RFTech is 1.55 times more volatile than Dgb Financial. It trades about -0.24 of its total potential returns per unit of risk. Dgb Financial is currently generating about 0.2 per unit of volatility. If you would invest  800,269  in Dgb Financial on December 22, 2024 and sell it today you would earn a total of  100,731  from holding Dgb Financial or generate 12.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

RFTech Co  vs.  Dgb Financial

RFTech

Risk-Adjusted Performance

Very Weak

Over the last 90 days RFTech Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Dgb Financial

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dgb Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Dgb Financial sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with RFTech and Dgb Financial

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

The idea behind RFTech Co and Dgb Financial 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 Global Correlations module to find global opportunities by holding instruments from different markets.