Correlation Between Ras Technology and Liberty Financial
Can any of the company-specific risk be diversified away by investing in both Ras Technology and Liberty Financial 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 Liberty Financial 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 Liberty Financial Group, you can compare the effects of market volatilities on Ras Technology and Liberty Financial 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 Liberty Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ras Technology and Liberty Financial.
Diversification Opportunities for Ras Technology and Liberty Financial
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ras and Liberty is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and Liberty Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liberty Financial 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 Liberty Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liberty Financial has no effect on the direction of Ras Technology i.e., Ras Technology and Liberty Financial go up and down completely randomly.
Pair Corralation between Ras Technology and Liberty Financial
Assuming the 90 days trading horizon Ras Technology Holdings is expected to under-perform the Liberty Financial. In addition to that, Ras Technology is 1.26 times more volatile than Liberty Financial Group. It trades about -0.04 of its total potential returns per unit of risk. Liberty Financial Group is currently generating about 0.17 per unit of volatility. If you would invest 320.00 in Liberty Financial Group on October 12, 2024 and sell it today you would earn a total of 18.00 from holding Liberty Financial Group or generate 5.63% 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. Liberty Financial Group
Performance |
| Timeline |
| Ras Technology Holdings |
| Liberty Financial |
Ras Technology and Liberty Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ras Technology and Liberty Financial
The main advantage of trading using opposite Ras Technology and Liberty Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ras Technology position performs unexpectedly, Liberty Financial 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 Liberty Financial will offset losses from the drop in Liberty Financial's long position.| Ras Technology vs. Zoom2u Technologies | Ras Technology vs. EMvision Medical Devices | Ras Technology vs. Genetic Technologies | Ras Technology vs. Fisher Paykel Healthcare |
| Liberty Financial vs. Seven West Media | Liberty Financial vs. Ras Technology Holdings | Liberty Financial vs. Southern Cross Media | Liberty Financial vs. Skycity Entertainment Group |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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