Correlation Between Intellian Technologies and RFTech

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

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

Diversification Opportunities for Intellian Technologies and RFTech

-0.13

Correlation Coefficient

Intellian Technologies  RFTech

Good diversification

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

Pair Corralation between Intellian Technologies and RFTech

Assuming the 90 days trading horizon Intellian Technologies is expected to generate 1.17 times more return on investment than RFTech. However, Intellian Technologies is 1.17 times more volatile than RFTech Co. It trades about 0.01 of its potential returns per unit of risk. RFTech Co is currently generating about -0.04 per unit of risk. 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

Intellian Technologies  vs.  RFTech Co

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.

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.

Pair Trading with Intellian Technologies and RFTech

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

The idea behind Intellian Technologies and RFTech Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.