Correlation Between Rackspace Technology and Bill

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

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

Diversification Opportunities for Rackspace Technology and Bill

0.27

Correlation Coefficient

Rackspace Technology  Bill

Modest diversification

The 3 months correlation between Rackspace and Bill is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Rackspace Technology and Bill Com Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bill Com Holdings and Rackspace 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 Rackspace Technology are associated (or correlated) with Bill. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bill Com Holdings has no effect on the direction of Rackspace Technology i.e., Rackspace Technology and Bill go up and down completely randomly.

Pair Corralation between Rackspace Technology and Bill

Considering the 90-day investment horizon Rackspace Technology is expected to generate 11.37 times less return on investment than Bill. In addition to that, Rackspace Technology is 1.2 times more volatile than Bill Com Holdings. It trades about 0.02 of its total potential returns per unit of risk. Bill Com Holdings is currently generating about 0.27 per unit of volatility. If you would invest  5,075  in Bill Com Holdings on September 14, 2024 and sell it today you would earn a total of  3,774  from holding Bill Com Holdings or generate 74.35% return on investment over 90 days.

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

Rackspace Technology  vs.  Bill Com Holdings

Rackspace Technology

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rackspace Technology are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Rackspace Technology is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Bill Com Holdings

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bill Com Holdings are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile essential indicators, Bill disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rackspace Technology and Bill

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

The idea behind Rackspace Technology and Bill Com Holdings 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.