Correlation Between Raval ACS and Photomyne

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

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

Diversification Opportunities for Raval ACS and Photomyne

0.11

Correlation Coefficient

Raval ACS  Photomyne

Average diversification

The 3 months correlation between Raval and Photomyne is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Raval ACS and Photomyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Photomyne and Raval ACS 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 Raval ACS 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 Raval ACS i.e., Raval ACS and Photomyne go up and down completely randomly.

Pair Corralation between Raval ACS and Photomyne

Assuming the 90 days trading horizon Raval ACS is expected to generate 2.29 times more return on investment than Photomyne. However, Raval ACS is 2.29 times more volatile than Photomyne. It trades about 0.15 of its potential returns per unit of risk. Photomyne is currently generating about 0.33 per unit of risk. If you would invest  19,500  in Raval ACS on September 12, 2024 and sell it today you would earn a total of  4,210  from holding Raval ACS or generate 21.59% return on investment over 90 days.

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

Raval ACS  vs.  Photomyne

Raval ACS

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raval ACS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Raval ACS sustained solid returns over the last few months and may actually be approaching a breakup point.

Photomyne

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Photomyne are ranked lower than 26 (%) 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 Raval ACS and Photomyne

The main advantage of trading using opposite Raval ACS and Photomyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raval ACS 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 Raval ACS 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.

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.