Correlation Between Raytech Holding and Gap,

Can any of the company-specific risk be diversified away by investing in both Raytech Holding and Gap, 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 Raytech Holding and Gap, into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Raytech Holding Limited and The Gap,, you can compare the effects of market volatilities on Raytech Holding and Gap, 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 Raytech Holding with a short position of Gap,. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytech Holding and Gap,.

Diversification Opportunities for Raytech Holding and Gap,

-0.5

Correlation Coefficient

Raytech Holding  Gap,

Very good diversification

The 3 months correlation between Raytech and Gap, is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Raytech Holding Limited and The Gap, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gap, and Raytech Holding 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 Raytech Holding Limited are associated (or correlated) with Gap,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gap, has no effect on the direction of Raytech Holding i.e., Raytech Holding and Gap, go up and down completely randomly.

Pair Corralation between Raytech Holding and Gap,

Considering the 90-day investment horizon Raytech Holding Limited is expected to under-perform the Gap,. In addition to that, Raytech Holding is 1.89 times more volatile than The Gap,. It trades about -0.02 of its total potential returns per unit of risk. The Gap, is currently generating about 0.05 per unit of volatility. If you would invest  2,266  in The Gap, on September 1, 2024 and sell it today you would earn a total of  159.00  from holding The Gap, or generate 7.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Raytech Holding Limited  vs.  The Gap,

Raytech Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raytech Holding Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Gap,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in The Gap, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively inconsistent basic indicators, Gap, may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Raytech Holding and Gap,

The main advantage of trading using opposite Raytech Holding and Gap, positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raytech Holding position performs unexpectedly, Gap, 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 Gap, will offset losses from the drop in Gap,'s long position.

The idea behind Raytech Holding Limited and The Gap, 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.