Correlation Between Rackspace Technology and Figs
Can any of the company-specific risk be diversified away by investing in both Rackspace Technology and Figs 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 Rackspace Technology and Figs into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rackspace Technology and Figs Inc, you can compare the effects of market volatilities on Rackspace Technology and Figs 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 Rackspace Technology with a short position of Figs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rackspace Technology and Figs.
Diversification Opportunities for Rackspace Technology and Figs
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rackspace and Figs is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Rackspace Technology and Figs Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figs Inc and Rackspace 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 Rackspace Technology are associated (or correlated) with Figs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figs Inc has no effect on the direction of Rackspace Technology i.e., Rackspace Technology and Figs go up and down completely randomly.
Pair Corralation between Rackspace Technology and Figs
Considering the 90-day investment horizon Rackspace Technology is expected to generate 0.8 times more return on investment than Figs. However, Rackspace Technology is 1.26 times less risky than Figs. It trades about 0.05 of its potential returns per unit of risk. Figs Inc is currently generating about -0.11 per unit of risk. If you would invest 256.00 in Rackspace Technology on August 31, 2024 and sell it today you would earn a total of 8.00 from holding Rackspace Technology or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rackspace Technology vs. Figs Inc
Performance |
| Timeline |
| Rackspace Technology |
| Figs Inc |
Rackspace Technology and Figs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rackspace Technology and Figs
The main advantage of trading using opposite Rackspace Technology and Figs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rackspace Technology position performs unexpectedly, Figs 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 Figs will offset losses from the drop in Figs' long position.| Rackspace Technology vs. GigaCloud Technology Class | Rackspace Technology vs. Alarum Technologies | Rackspace Technology vs. Stem Inc | Rackspace Technology vs. Pagaya Technologies |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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