Correlation Between Ritchie Bros and St Augustine
Can any of the company-specific risk be diversified away by investing in both Ritchie Bros and St Augustine 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 Ritchie Bros and St Augustine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ritchie Bros Auctioneers and St Augustine Gold, you can compare the effects of market volatilities on Ritchie Bros and St Augustine 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 Ritchie Bros with a short position of St Augustine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ritchie Bros and St Augustine.
Diversification Opportunities for Ritchie Bros and St Augustine
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ritchie and SAU is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Ritchie Bros Auctioneers and St Augustine Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Augustine Gold and Ritchie Bros 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 Ritchie Bros Auctioneers are associated (or correlated) with St Augustine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Augustine Gold has no effect on the direction of Ritchie Bros i.e., Ritchie Bros and St Augustine go up and down completely randomly.
Pair Corralation between Ritchie Bros and St Augustine
Assuming the 90 days trading horizon Ritchie Bros Auctioneers is expected to generate 0.3 times more return on investment than St Augustine. However, Ritchie Bros Auctioneers is 3.29 times less risky than St Augustine. It trades about 0.12 of its potential returns per unit of risk. St Augustine Gold is currently generating about 0.02 per unit of risk. If you would invest 10,243 in Ritchie Bros Auctioneers on September 1, 2024 and sell it today you would earn a total of 3,591 from holding Ritchie Bros Auctioneers or generate 35.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ritchie Bros Auctioneers vs. St Augustine Gold
Performance |
| Timeline |
| Ritchie Bros Auctioneers |
| St Augustine Gold |
Ritchie Bros and St Augustine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ritchie Bros and St Augustine
The main advantage of trading using opposite Ritchie Bros and St Augustine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ritchie Bros position performs unexpectedly, St Augustine 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 St Augustine will offset losses from the drop in St Augustine's long position.| Ritchie Bros vs. Toromont Industries | Ritchie Bros vs. Stantec | Ritchie Bros vs. Finning International | Ritchie Bros vs. FirstService Corp |
| St Augustine vs. Northcliff Resources | St Augustine vs. Lupaka Gold Corp | St Augustine vs. Angkor Resources Corp | St Augustine vs. Minco Capital Corp |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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