Correlation Between Ras Technology and Asara Resources

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

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

Diversification Opportunities for Ras Technology and Asara Resources

-0.67

Correlation Coefficient

Ras Technology  Asara Resources

Excellent diversification

The 3 months correlation between Ras and Asara is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and Asara Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asara Resources and Ras 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 Ras Technology Holdings are associated (or correlated) with Asara Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asara Resources has no effect on the direction of Ras Technology i.e., Ras Technology and Asara Resources go up and down completely randomly.

Pair Corralation between Ras Technology and Asara Resources

Assuming the 90 days trading horizon Ras Technology Holdings is expected to under-perform the Asara Resources. But the stock apears to be less risky and, when comparing its historical volatility, Ras Technology Holdings is 2.42 times less risky than Asara Resources. The stock trades about -0.21 of its potential returns per unit of risk. The Asara Resources is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1.10  in Asara Resources on September 2, 2024 and sell it today you would earn a total of  1.20  from holding Asara Resources or generate 109.09% return on investment over 90 days.

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

Ras Technology Holdings  vs.  Asara Resources

Ras Technology Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ras Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Asara Resources

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Asara Resources are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Asara Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ras Technology and Asara Resources

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

The idea behind Ras Technology Holdings and Asara Resources 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.