Correlation Between Group 6 and Ras Technology
Can any of the company-specific risk be diversified away by investing in both Group 6 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 Group 6 and Ras Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Group 6 Metals and Ras Technology Holdings, you can compare the effects of market volatilities on Group 6 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 Group 6 with a short position of Ras Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Group 6 and Ras Technology.
Diversification Opportunities for Group 6 and Ras Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Group and Ras is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Group 6 Metals 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 Group 6 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 Group 6 Metals 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 Group 6 i.e., Group 6 and Ras Technology go up and down completely randomly.
Pair Corralation between Group 6 and Ras Technology
Assuming the 90 days trading horizon Group 6 Metals is expected to under-perform the Ras Technology. In addition to that, Group 6 is 1.45 times more volatile than Ras Technology Holdings. It trades about -0.04 of its total potential returns per unit of risk. Ras Technology Holdings is currently generating about 0.04 per unit of volatility. If you would invest 50.00 in Ras Technology Holdings on October 26, 2024 and sell it today you would earn a total of 28.00 from holding Ras Technology Holdings or generate 56.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Group 6 Metals vs. Ras Technology Holdings
Performance |
| Timeline |
| Group 6 Metals |
| Ras Technology Holdings |
Group 6 and Ras Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Group 6 and Ras Technology
The main advantage of trading using opposite Group 6 and Ras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Group 6 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.| Group 6 vs. National Australia Bank | Group 6 vs. Galena Mining | Group 6 vs. Great Southern Mining | Group 6 vs. Globe Metals Mining |
| Ras Technology vs. Global Health | Ras Technology vs. Apiam Animal Health | Ras Technology vs. Regal Investment | Ras Technology vs. Carlton Investments |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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