Correlation Between Advanced Braking and Ras Technology
Can any of the company-specific risk be diversified away by investing in both Advanced Braking and Ras Technology 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 Advanced Braking and Ras Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Braking Technology and Ras Technology Holdings, you can compare the effects of market volatilities on Advanced Braking and Ras Technology 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 Advanced Braking with a short position of Ras Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Braking and Ras Technology.
Diversification Opportunities for Advanced Braking and Ras Technology
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Advanced and Ras is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Braking Technology and Ras Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ras Technology Holdings and Advanced Braking 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 Advanced Braking Technology are associated (or correlated) with Ras Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ras Technology Holdings has no effect on the direction of Advanced Braking i.e., Advanced Braking and Ras Technology go up and down completely randomly.
Pair Corralation between Advanced Braking and Ras Technology
Assuming the 90 days trading horizon Advanced Braking Technology is expected to generate 0.92 times more return on investment than Ras Technology. However, Advanced Braking Technology is 1.09 times less risky than Ras Technology. It trades about 0.09 of its potential returns per unit of risk. Ras Technology Holdings is currently generating about -0.16 per unit of risk. If you would invest 7.90 in Advanced Braking Technology on August 29, 2024 and sell it today you would earn a total of 1.00 from holding Advanced Braking Technology or generate 12.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.46% |
| Values | Daily Returns |
Advanced Braking Technology vs. Ras Technology Holdings
Performance |
| Timeline |
| Advanced Braking Tec |
| Ras Technology Holdings |
Advanced Braking and Ras Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Braking and Ras Technology
The main advantage of trading using opposite Advanced Braking and Ras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Braking position performs unexpectedly, Ras Technology 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 Ras Technology will offset losses from the drop in Ras Technology's long position.| Advanced Braking vs. Summit Resources Limited | Advanced Braking vs. Champion Iron | Advanced Braking vs. Ridley | Advanced Braking vs. Peel Mining |
| Ras Technology vs. PVW Resources | Ras Technology vs. Woolworths | Ras Technology vs. Wesfarmers | Ras Technology vs. Coles Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |