Correlation Between Siamese Asset and Ratch Group

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

By analyzing existing cross correlation between Siamese Asset Public and Ratch Group Public, you can compare the effects of market volatilities on Siamese Asset and Ratch Group 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 Siamese Asset with a short position of Ratch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siamese Asset and Ratch Group.

Diversification Opportunities for Siamese Asset and Ratch Group

0.44

Correlation Coefficient

Siamese Asset  Ratch Group

Very weak diversification

The 3 months correlation between Siamese and Ratch is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Siamese Asset Public and Ratch Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ratch Group Public and Siamese Asset 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 Siamese Asset Public are associated (or correlated) with Ratch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ratch Group Public has no effect on the direction of Siamese Asset i.e., Siamese Asset and Ratch Group go up and down completely randomly.

Pair Corralation between Siamese Asset and Ratch Group

Assuming the 90 days horizon Siamese Asset Public is expected to generate 0.71 times more return on investment than Ratch Group. However, Siamese Asset Public is 1.41 times less risky than Ratch Group. It trades about 0.08 of its potential returns per unit of risk. Ratch Group Public is currently generating about -0.06 per unit of risk. If you would invest  740.00  in Siamese Asset Public on September 23, 2024 and sell it today you would earn a total of  10.00  from holding Siamese Asset Public or generate 1.35% return on investment over 90 days.

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

Siamese Asset Public  vs.  Ratch Group Public

Siamese Asset Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siamese Asset Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Siamese Asset is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Ratch Group Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ratch Group Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental drivers remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Siamese Asset and Ratch Group

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

The idea behind Siamese Asset Public and Ratch Group Public 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.