Correlation Between YH Dimri and Rapac Communication

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

By analyzing existing cross correlation between YH Dimri Construction and Rapac Communication Infrastructure, you can compare the effects of market volatilities on YH Dimri and Rapac Communication 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 YH Dimri with a short position of Rapac Communication. Check out your portfolio center. Please also check ongoing floating volatility patterns of YH Dimri and Rapac Communication.

Diversification Opportunities for YH Dimri and Rapac Communication

0.73

Correlation Coefficient

YH Dimri  Rapac Communication

Poor diversification

The 3 months correlation between DIMRI and Rapac is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding YH Dimri Construction and Rapac Communication Infrastruc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rapac Communication and YH Dimri 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 YH Dimri Construction are associated (or correlated) with Rapac Communication. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rapac Communication has no effect on the direction of YH Dimri i.e., YH Dimri and Rapac Communication go up and down completely randomly.

Pair Corralation between YH Dimri and Rapac Communication

Assuming the 90 days trading horizon YH Dimri is expected to generate 1.01 times less return on investment than Rapac Communication. In addition to that, YH Dimri is 1.12 times more volatile than Rapac Communication Infrastructure. It trades about 0.07 of its total potential returns per unit of risk. Rapac Communication Infrastructure is currently generating about 0.08 per unit of volatility. If you would invest  255,300  in Rapac Communication Infrastructure on September 4, 2024 and sell it today you would earn a total of  12,400  from holding Rapac Communication Infrastructure or generate 4.86% return on investment over 90 days.

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

YH Dimri Construction  vs.  Rapac Communication Infrastruc

YH Dimri Construction

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in YH Dimri Construction are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, YH Dimri may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Rapac Communication

Risk-Adjusted Performance

6 of 100

Weak

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

Pair Trading with YH Dimri and Rapac Communication

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

The idea behind YH Dimri Construction and Rapac Communication Infrastructure 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.

Check out your portfolio center.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.