Correlation Between Civeo Corp and RCM Technologies

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

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

Diversification Opportunities for Civeo Corp and RCM Technologies

0.18

Correlation Coefficient

Civeo Corp  RCM Technologies

Average diversification

The 3 months correlation between Civeo and RCM is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Civeo Corp and RCM Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RCM Technologies and Civeo Corp 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 Civeo Corp 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 Civeo Corp i.e., Civeo Corp and RCM Technologies go up and down completely randomly.

Pair Corralation between Civeo Corp and RCM Technologies

Given the investment horizon of 90 days Civeo Corp is expected to generate 1.13 times more return on investment than RCM Technologies. However, Civeo Corp is 1.13 times more volatile than RCM Technologies. It trades about 0.03 of its potential returns per unit of risk. RCM Technologies is currently generating about -0.23 per unit of risk. If you would invest  2,200  in Civeo Corp on December 27, 2024 and sell it today you would earn a total of  40.00  from holding Civeo Corp or generate 1.82% return on investment over 90 days.

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

Civeo Corp  vs.  RCM Technologies

Civeo Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Civeo Corp are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy technical and fundamental indicators, Civeo Corp is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

RCM Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days RCM Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's primary indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Civeo Corp and RCM Technologies

The main advantage of trading using opposite Civeo Corp and RCM Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Civeo Corp 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.

The idea behind Civeo Corp and RCM 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.