Correlation Between Murphy USA and Rectitude Holdings
Can any of the company-specific risk be diversified away by investing in both Murphy USA and Rectitude Holdings 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 Murphy USA and Rectitude Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Murphy USA and Rectitude Holdings Ltd, you can compare the effects of market volatilities on Murphy USA and Rectitude Holdings 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 Murphy USA with a short position of Rectitude Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Murphy USA and Rectitude Holdings.
Diversification Opportunities for Murphy USA and Rectitude Holdings
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Murphy and Rectitude is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Murphy USA and Rectitude Holdings Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rectitude Holdings and Murphy USA 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 Murphy USA are associated (or correlated) with Rectitude Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rectitude Holdings has no effect on the direction of Murphy USA i.e., Murphy USA and Rectitude Holdings go up and down completely randomly.
Pair Corralation between Murphy USA and Rectitude Holdings
Given the investment horizon of 90 days Murphy USA is expected to generate 12.25 times less return on investment than Rectitude Holdings. But when comparing it to its historical volatility, Murphy USA is 5.31 times less risky than Rectitude Holdings. It trades about 0.21 of its potential returns per unit of risk. Rectitude Holdings Ltd is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 358.00 in Rectitude Holdings Ltd on September 12, 2024 and sell it today you would earn a total of 275.00 from holding Rectitude Holdings Ltd or generate 76.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Murphy USA vs. Rectitude Holdings Ltd
Performance |
| Timeline |
| Murphy USA |
| Rectitude Holdings |
Murphy USA and Rectitude Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Murphy USA and Rectitude Holdings
The main advantage of trading using opposite Murphy USA and Rectitude Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Murphy USA position performs unexpectedly, Rectitude Holdings 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 Rectitude Holdings will offset losses from the drop in Rectitude Holdings' long position.| Murphy USA vs. Group 1 Automotive | Murphy USA vs. Murphy Oil | Murphy USA vs. LCI Industries | Murphy USA vs. Penske Automotive Group |
| Rectitude Holdings vs. ZOOZ Power Ltd | Rectitude Holdings vs. ZOOZ Power Ltd | Rectitude Holdings vs. JBDI Holdings Limited | Rectitude Holdings vs. Murphy USA |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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