Correlation Between Richtech Robotics and Graham

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

By analyzing existing cross correlation between Richtech Robotics Class and Graham, you can compare the effects of market volatilities on Richtech Robotics and Graham 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 Richtech Robotics with a short position of Graham. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richtech Robotics and Graham.

Diversification Opportunities for Richtech Robotics and Graham

-0.43

Correlation Coefficient

Richtech Robotics  Graham

Very good diversification

The 3 months correlation between Richtech and Graham is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Richtech Robotics Class and Graham in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham and Richtech Robotics 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 Richtech Robotics Class are associated (or correlated) with Graham. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham has no effect on the direction of Richtech Robotics i.e., Richtech Robotics and Graham go up and down completely randomly.

Pair Corralation between Richtech Robotics and Graham

Allowing for the 90-day total investment horizon Richtech Robotics Class is expected to under-perform the Graham. In addition to that, Richtech Robotics is 2.17 times more volatile than Graham. It trades about -0.11 of its total potential returns per unit of risk. Graham is currently generating about 0.22 per unit of volatility. If you would invest  2,965  in Graham on September 3, 2024 and sell it today you would earn a total of  1,519  from holding Graham or generate 51.23% return on investment over 90 days.

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

Richtech Robotics Class  vs.  Graham

Richtech Robotics Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Richtech Robotics Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Graham

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Graham are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical indicators, Graham displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Richtech Robotics and Graham

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

The idea behind Richtech Robotics Class and Graham 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 Global Correlations module to find global opportunities by holding instruments from different markets.