Correlation Between Reitar Logtech and Shimmick Common

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

By analyzing existing cross correlation between Reitar Logtech Holdings and Shimmick Common, you can compare the effects of market volatilities on Reitar Logtech and Shimmick Common 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 Reitar Logtech with a short position of Shimmick Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reitar Logtech and Shimmick Common.

Diversification Opportunities for Reitar Logtech and Shimmick Common

-0.68

Correlation Coefficient

Reitar Logtech  Shimmick Common

Excellent diversification

The 3 months correlation between Reitar and Shimmick is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Reitar Logtech Holdings and Shimmick Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimmick Common and Reitar Logtech 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 Reitar Logtech Holdings are associated (or correlated) with Shimmick Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimmick Common has no effect on the direction of Reitar Logtech i.e., Reitar Logtech and Shimmick Common go up and down completely randomly.

Pair Corralation between Reitar Logtech and Shimmick Common

Given the investment horizon of 90 days Reitar Logtech is expected to generate 16.2 times less return on investment than Shimmick Common. In addition to that, Reitar Logtech is 2.35 times more volatile than Shimmick Common. It trades about 0.0 of its total potential returns per unit of risk. Shimmick Common is currently generating about 0.15 per unit of volatility. If you would invest  210.00  in Shimmick Common on September 22, 2024 and sell it today you would earn a total of  36.00  from holding Shimmick Common or generate 17.14% return on investment over 90 days.

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

Reitar Logtech Holdings  vs.  Shimmick Common

Reitar Logtech Holdings

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Reitar Logtech Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Reitar Logtech reported solid returns over the last few months and may actually be approaching a breakup point.

Shimmick Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shimmick Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Shimmick Common is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Reitar Logtech and Shimmick Common

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

The idea behind Reitar Logtech Holdings and Shimmick Common 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.