Correlation Between Chia and RF MICRO

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

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

Diversification Opportunities for Chia and RF MICRO

-0.64

Correlation Coefficient

Chia  RF MICRO

Excellent diversification

The 3 months correlation between Chia and RFM is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chia and RF MICRO DEVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RF MICRO DEVICES and Chia 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 Chia are associated (or correlated) with RF MICRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RF MICRO DEVICES has no effect on the direction of Chia i.e., Chia and RF MICRO go up and down completely randomly.

Pair Corralation between Chia and RF MICRO

Assuming the 90 days trading horizon Chia is expected to under-perform the RF MICRO. In addition to that, Chia is 1.66 times more volatile than RF MICRO DEVICES. It trades about -0.02 of its total potential returns per unit of risk. RF MICRO DEVICES is currently generating about 0.05 per unit of volatility. If you would invest  38.00  in RF MICRO DEVICES on October 26, 2024 and sell it today you would earn a total of  31.00  from holding RF MICRO DEVICES or generate 81.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	60.08%
Values	Daily Returns

Chia  vs.  RF MICRO DEVICES

Chia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

RF MICRO DEVICES

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days RF MICRO DEVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's primary indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Chia and RF MICRO

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

The idea behind Chia and RF MICRO DEVICES 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.