Correlation Between Ras Technology and Aurum Resources
Can any of the company-specific risk be diversified away by investing in both Ras Technology and Aurum Resources 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 Ras Technology and Aurum Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ras Technology Holdings and Aurum Resources, you can compare the effects of market volatilities on Ras Technology and Aurum Resources 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 Ras Technology with a short position of Aurum Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ras Technology and Aurum Resources.
Diversification Opportunities for Ras Technology and Aurum Resources
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ras and Aurum is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and Aurum Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurum Resources and Ras Technology 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 Ras Technology Holdings are associated (or correlated) with Aurum Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurum Resources has no effect on the direction of Ras Technology i.e., Ras Technology and Aurum Resources go up and down completely randomly.
Pair Corralation between Ras Technology and Aurum Resources
Assuming the 90 days trading horizon Ras Technology is expected to generate 1.4 times less return on investment than Aurum Resources. But when comparing it to its historical volatility, Ras Technology Holdings is 1.33 times less risky than Aurum Resources. It trades about 0.05 of its potential returns per unit of risk. Aurum Resources is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Aurum Resources on September 4, 2024 and sell it today you would earn a total of 20.00 from holding Aurum Resources or generate 117.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ras Technology Holdings vs. Aurum Resources
Performance |
| Timeline |
| Ras Technology Holdings |
| Aurum Resources |
Ras Technology and Aurum Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ras Technology and Aurum Resources
The main advantage of trading using opposite Ras Technology and Aurum Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ras Technology position performs unexpectedly, Aurum Resources 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 Aurum Resources will offset losses from the drop in Aurum Resources' long position.| Ras Technology vs. Aneka Tambang Tbk | Ras Technology vs. National Australia Bank | Ras Technology vs. Commonwealth Bank of | Ras Technology vs. Commonwealth Bank of |
| Aurum Resources vs. Talisman Mining | Aurum Resources vs. Farm Pride Foods | Aurum Resources vs. Legacy Iron Ore | Aurum Resources vs. Perseus Mining |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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