Correlation Between Ras Technology and Challenger
Can any of the company-specific risk be diversified away by investing in both Ras Technology and Challenger 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 Challenger 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 Challenger, you can compare the effects of market volatilities on Ras Technology and Challenger 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 Challenger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ras Technology and Challenger.
Diversification Opportunities for Ras Technology and Challenger
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ras and Challenger is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and Challenger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Challenger 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 Challenger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Challenger has no effect on the direction of Ras Technology i.e., Ras Technology and Challenger go up and down completely randomly.
Pair Corralation between Ras Technology and Challenger
Assuming the 90 days trading horizon Ras Technology Holdings is expected to generate 2.26 times more return on investment than Challenger. However, Ras Technology is 2.26 times more volatile than Challenger. It trades about 0.05 of its potential returns per unit of risk. Challenger is currently generating about -0.01 per unit of risk. If you would invest 42.00 in Ras Technology Holdings on November 19, 2024 and sell it today you would earn a total of 32.00 from holding Ras Technology Holdings or generate 76.19% 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. Challenger
Performance |
| Timeline |
| Ras Technology Holdings |
| Challenger |
Ras Technology and Challenger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ras Technology and Challenger
The main advantage of trading using opposite Ras Technology and Challenger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ras Technology position performs unexpectedly, Challenger 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 Challenger will offset losses from the drop in Challenger's long position.| Ras Technology vs. Qbe Insurance Group | Ras Technology vs. Ainsworth Game Technology | Ras Technology vs. Collins Foods | Ras Technology vs. Technology One |
| Challenger vs. Beston Global Food | Challenger vs. Collins Foods | Challenger vs. Rand Mining | Challenger vs. Unico Silver |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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