Correlation Between RFTech and Intellian Technologies

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

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

Diversification Opportunities for RFTech and Intellian Technologies

-0.13

Correlation Coefficient

RFTech  Intellian Technologies

Good diversification

The 3 months correlation between RFTech and Intellian is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding RFTech Co and Intellian Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intellian Technologies 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 Intellian Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intellian Technologies has no effect on the direction of RFTech i.e., RFTech and Intellian Technologies go up and down completely randomly.

Pair Corralation between RFTech and Intellian Technologies

Assuming the 90 days trading horizon RFTech Co is expected to under-perform the Intellian Technologies. But the stock apears to be less risky and, when comparing its historical volatility, RFTech Co is 1.17 times less risky than Intellian Technologies. The stock trades about -0.04 of its potential returns per unit of risk. The Intellian Technologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  3,515,600  in Intellian Technologies on December 2, 2024 and sell it today you would lose (35,600) from holding Intellian Technologies or give up 1.01% of portfolio value over 90 days.

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

RFTech Co  vs.  Intellian Technologies

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Intellian Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Intellian Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Intellian Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with RFTech and Intellian Technologies

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

The idea behind RFTech Co and Intellian Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.