Correlation Between Ritchie Bros and Winpak
Can any of the company-specific risk be diversified away by investing in both Ritchie Bros and Winpak 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 Winpak 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 Winpak, you can compare the effects of market volatilities on Ritchie Bros and Winpak 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 Winpak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ritchie Bros and Winpak.
Diversification Opportunities for Ritchie Bros and Winpak
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Ritchie and Winpak is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Ritchie Bros Auctioneers and Winpak in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Winpak 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 Winpak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Winpak has no effect on the direction of Ritchie Bros i.e., Ritchie Bros and Winpak go up and down completely randomly.
Pair Corralation between Ritchie Bros and Winpak
Assuming the 90 days trading horizon Ritchie Bros Auctioneers is expected to generate 1.4 times more return on investment than Winpak. However, Ritchie Bros is 1.4 times more volatile than Winpak. It trades about 0.2 of its potential returns per unit of risk. Winpak is currently generating about 0.17 per unit of risk. If you would invest 11,488 in Ritchie Bros Auctioneers on August 28, 2024 and sell it today you would earn a total of 2,267 from holding Ritchie Bros Auctioneers or generate 19.73% 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. Winpak
Performance |
| Timeline |
| Ritchie Bros Auctioneers |
| Winpak |
Ritchie Bros and Winpak Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ritchie Bros and Winpak
The main advantage of trading using opposite Ritchie Bros and Winpak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ritchie Bros position performs unexpectedly, Winpak 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 Winpak will offset losses from the drop in Winpak's long position.| Ritchie Bros vs. Toromont Industries | Ritchie Bros vs. Stantec | Ritchie Bros vs. Finning International | Ritchie Bros vs. FirstService Corp |
| Winpak vs. HPQ Silicon Resources | Winpak vs. Champion Iron | Winpak vs. Osisko Metals | Winpak vs. Bip Investment 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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