Correlation Between Richtech Robotics and ITT
Can any of the company-specific risk be diversified away by investing in both Richtech Robotics and ITT 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 Richtech Robotics and ITT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Richtech Robotics Class and ITT Inc, you can compare the effects of market volatilities on Richtech Robotics and ITT 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 Richtech Robotics with a short position of ITT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richtech Robotics and ITT.
Diversification Opportunities for Richtech Robotics and ITT
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Richtech and ITT is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Richtech Robotics Class and ITT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITT Inc and Richtech Robotics 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 Richtech Robotics Class are associated (or correlated) with ITT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITT Inc has no effect on the direction of Richtech Robotics i.e., Richtech Robotics and ITT go up and down completely randomly.
Pair Corralation between Richtech Robotics and ITT
Allowing for the 90-day total investment horizon Richtech Robotics Class is expected to under-perform the ITT. In addition to that, Richtech Robotics is 3.91 times more volatile than ITT Inc. It trades about -0.04 of its total potential returns per unit of risk. ITT Inc is currently generating about 0.21 per unit of volatility. If you would invest 14,450 in ITT Inc on August 24, 2024 and sell it today you would earn a total of 1,096 from holding ITT Inc or generate 7.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Richtech Robotics Class vs. ITT Inc
Performance |
| Timeline |
| Richtech Robotics Class |
| ITT Inc |
Richtech Robotics and ITT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Richtech Robotics and ITT
The main advantage of trading using opposite Richtech Robotics and ITT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Richtech Robotics position performs unexpectedly, ITT 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 ITT will offset losses from the drop in ITT's long position.| Richtech Robotics vs. Small Cap Core | Richtech Robotics vs. Freedom Holding Corp | Richtech Robotics vs. Gfl Environmental Holdings | Richtech Robotics vs. Growth Fund Of |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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