Correlation Between Coles and Ras Technology
Can any of the company-specific risk be diversified away by investing in both Coles 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 Coles and Ras Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coles Group and Ras Technology Holdings, you can compare the effects of market volatilities on Coles 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 Coles with a short position of Ras Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coles and Ras Technology.
Diversification Opportunities for Coles and Ras Technology
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Coles and Ras is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Coles Group 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 Coles 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 Coles Group 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 Coles i.e., Coles and Ras Technology go up and down completely randomly.
Pair Corralation between Coles and Ras Technology
Assuming the 90 days trading horizon Coles is expected to generate 4.91 times less return on investment than Ras Technology. But when comparing it to its historical volatility, Coles Group is 4.26 times less risky than Ras Technology. It trades about 0.03 of its potential returns per unit of risk. Ras Technology Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 52.00 in Ras Technology Holdings on November 27, 2024 and sell it today you would earn a total of 21.00 from holding Ras Technology Holdings or generate 40.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coles Group vs. Ras Technology Holdings
Performance |
| Timeline |
| Coles Group |
| Ras Technology Holdings |
Coles and Ras Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coles and Ras Technology
The main advantage of trading using opposite Coles and Ras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coles 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.| Coles vs. Hutchison Telecommunications | Coles vs. MetalsGrove Mining | Coles vs. Galena Mining | Coles vs. Saferoads Holdings |
| Ras Technology vs. Lendlease Group | Ras Technology vs. National Storage REIT | Ras Technology vs. Skycity Entertainment Group | Ras Technology vs. Dicker Data |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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