Correlation Between Energy Absolute and Ratch Group
Can any of the company-specific risk be diversified away by investing in both Energy Absolute and Ratch Group 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 Energy Absolute and Ratch Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Energy Absolute Public and Ratch Group Public, you can compare the effects of market volatilities on Energy Absolute and Ratch Group 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 Energy Absolute with a short position of Ratch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Energy Absolute and Ratch Group.
Diversification Opportunities for Energy Absolute and Ratch Group
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Energy and Ratch is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Energy Absolute Public and Ratch Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratch Group Public and Energy Absolute 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 Energy Absolute Public are associated (or correlated) with Ratch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratch Group Public has no effect on the direction of Energy Absolute i.e., Energy Absolute and Ratch Group go up and down completely randomly.
Pair Corralation between Energy Absolute and Ratch Group
Assuming the 90 days horizon Energy Absolute Public is expected to under-perform the Ratch Group. In addition to that, Energy Absolute is 3.32 times more volatile than Ratch Group Public. It trades about -0.16 of its total potential returns per unit of risk. Ratch Group Public is currently generating about -0.12 per unit of volatility. If you would invest 3,225 in Ratch Group Public on September 1, 2024 and sell it today you would lose (150.00) from holding Ratch Group Public or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Energy Absolute Public vs. Ratch Group Public
Performance |
| Timeline |
| Energy Absolute Public |
| Ratch Group Public |
Energy Absolute and Ratch Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Energy Absolute and Ratch Group
The main advantage of trading using opposite Energy Absolute and Ratch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Energy Absolute position performs unexpectedly, Ratch Group 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 Ratch Group will offset losses from the drop in Ratch Group's long position.| Energy Absolute vs. Gulf Energy Development | Energy Absolute vs. Global Power Synergy | Energy Absolute vs. CP ALL Public | Energy Absolute vs. Bangkok Dusit Medical |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |