Correlation Between Research Frontiers and Integrated Media
Can any of the company-specific risk be diversified away by investing in both Research Frontiers and Integrated Media 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 Research Frontiers and Integrated Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Research Frontiers Incorporated and Integrated Media Technology, you can compare the effects of market volatilities on Research Frontiers and Integrated Media 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 Research Frontiers with a short position of Integrated Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Research Frontiers and Integrated Media.
Diversification Opportunities for Research Frontiers and Integrated Media
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Research and Integrated is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Research Frontiers Incorporate and Integrated Media Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Media Tec and Research Frontiers 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 Research Frontiers Incorporated are associated (or correlated) with Integrated Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Media Tec has no effect on the direction of Research Frontiers i.e., Research Frontiers and Integrated Media go up and down completely randomly.
Pair Corralation between Research Frontiers and Integrated Media
Given the investment horizon of 90 days Research Frontiers Incorporated is expected to under-perform the Integrated Media. But the stock apears to be less risky and, when comparing its historical volatility, Research Frontiers Incorporated is 12.56 times less risky than Integrated Media. The stock trades about -0.21 of its potential returns per unit of risk. The Integrated Media Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 125.00 in Integrated Media Technology on December 31, 2024 and sell it today you would earn a total of 47.00 from holding Integrated Media Technology or generate 37.6% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Research Frontiers Incorporate vs. Integrated Media Technology
Performance |
Timeline |
Research Frontiers |
Integrated Media Tec |
Research Frontiers and Integrated Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Research Frontiers and Integrated Media
The main advantage of trading using opposite Research Frontiers and Integrated Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Research Frontiers position performs unexpectedly, Integrated Media 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 Integrated Media will offset losses from the drop in Integrated Media's long position.Research Frontiers vs. Richardson Electronics | Research Frontiers vs. Orion Energy Systems | Research Frontiers vs. RF Industries | Research Frontiers vs. Reading International |
Integrated Media vs. SigmaTron International | Integrated Media vs. Data IO | Integrated Media vs. Research Frontiers Incorporated | Integrated Media vs. Maris Tech |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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