Correlation Between Ras Technology and Beach Energy
Can any of the company-specific risk be diversified away by investing in both Ras Technology and Beach Energy 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 Beach Energy 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 Beach Energy, you can compare the effects of market volatilities on Ras Technology and Beach Energy 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 Beach Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ras Technology and Beach Energy.
Diversification Opportunities for Ras Technology and Beach Energy
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Ras and Beach is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and Beach Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beach Energy 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 Beach Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beach Energy has no effect on the direction of Ras Technology i.e., Ras Technology and Beach Energy go up and down completely randomly.
Pair Corralation between Ras Technology and Beach Energy
Assuming the 90 days trading horizon Ras Technology Holdings is expected to under-perform the Beach Energy. In addition to that, Ras Technology is 2.61 times more volatile than Beach Energy. It trades about -0.27 of its total potential returns per unit of risk. Beach Energy is currently generating about 0.06 per unit of volatility. If you would invest 127.00 in Beach Energy on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Beach Energy or generate 1.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ras Technology Holdings vs. Beach Energy
Performance |
| Timeline |
| Ras Technology Holdings |
| Beach Energy |
Ras Technology and Beach Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ras Technology and Beach Energy
The main advantage of trading using opposite Ras Technology and Beach Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ras Technology position performs unexpectedly, Beach Energy 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 Beach Energy will offset losses from the drop in Beach Energy's long position.| Ras Technology vs. MA Financial Group | Ras Technology vs. EVE Health Group | Ras Technology vs. Westpac Banking | Ras Technology vs. Wt Financial Group |
| Beach Energy vs. Hudson Investment Group | Beach Energy vs. Ras Technology Holdings | Beach Energy vs. Olivers Real Food | Beach Energy vs. Dug Technology |
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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