Correlation Between Rapac Communication and Photomyne

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

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

Diversification Opportunities for Rapac Communication and Photomyne

0.72

Correlation Coefficient

Rapac Communication  Photomyne

Poor diversification

The 3 months correlation between Rapac and Photomyne is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Rapac Communication Infrastruc and Photomyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photomyne and Rapac Communication 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 Rapac Communication Infrastructure are associated (or correlated) with Photomyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Photomyne has no effect on the direction of Rapac Communication i.e., Rapac Communication and Photomyne go up and down completely randomly.

Pair Corralation between Rapac Communication and Photomyne

Assuming the 90 days trading horizon Rapac Communication is expected to generate 3.47 times less return on investment than Photomyne. In addition to that, Rapac Communication is 1.2 times more volatile than Photomyne. It trades about 0.08 of its total potential returns per unit of risk. Photomyne is currently generating about 0.33 per unit of volatility. If you would invest  234,200  in Photomyne on September 4, 2024 and sell it today you would earn a total of  45,400  from holding Photomyne or generate 19.39% return on investment over 90 days.

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

Rapac Communication Infrastruc  vs.  Photomyne

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.

Photomyne

Risk-Adjusted Performance

25 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Photomyne are ranked lower than 25 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Photomyne sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rapac Communication and Photomyne

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

The idea behind Rapac Communication Infrastructure and Photomyne 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.