Correlation Between Ratch Group and BGrimm Power
Can any of the company-specific risk be diversified away by investing in both Ratch Group and BGrimm Power 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 Ratch Group and BGrimm Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ratch Group Public and BGrimm Power Public, you can compare the effects of market volatilities on Ratch Group and BGrimm Power 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 Ratch Group with a short position of BGrimm Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ratch Group and BGrimm Power.
Diversification Opportunities for Ratch Group and BGrimm Power
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ratch and BGrimm is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Ratch Group Public and BGrimm Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BGrimm Power Public and Ratch Group 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 Ratch Group Public are associated (or correlated) with BGrimm Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BGrimm Power Public has no effect on the direction of Ratch Group i.e., Ratch Group and BGrimm Power go up and down completely randomly.
Pair Corralation between Ratch Group and BGrimm Power
Assuming the 90 days trading horizon Ratch Group Public is expected to generate 0.8 times more return on investment than BGrimm Power. However, Ratch Group Public is 1.25 times less risky than BGrimm Power. It trades about -0.08 of its potential returns per unit of risk. BGrimm Power Public is currently generating about -0.2 per unit of risk. If you would invest 3,250 in Ratch Group Public on September 26, 2024 and sell it today you would lose (225.00) from holding Ratch Group Public or give up 6.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ratch Group Public vs. BGrimm Power Public
Performance |
Timeline |
Ratch Group Public |
BGrimm Power Public |
Ratch Group and BGrimm Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ratch Group and BGrimm Power
The main advantage of trading using opposite Ratch Group and BGrimm Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ratch Group position performs unexpectedly, BGrimm Power 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 BGrimm Power will offset losses from the drop in BGrimm Power's long position.The idea behind Ratch Group Public and BGrimm Power Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.BGrimm Power vs. Ratch Group Public | BGrimm Power vs. BTS Group Holdings | BGrimm Power vs. PTG Energy PCL |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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