Correlation Between SPCG Public and Ratch Group

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

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

Diversification Opportunities for SPCG Public and Ratch Group

0.62

Correlation Coefficient

SPCG Public  Ratch Group

Poor diversification

The 3 months correlation between SPCG and Ratch is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding SPCG 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 SPCG Public 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 SPCG 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 SPCG Public i.e., SPCG Public and Ratch Group go up and down completely randomly.

Pair Corralation between SPCG Public and Ratch Group

Assuming the 90 days trading horizon SPCG Public is expected to under-perform the Ratch Group. But the stock apears to be less risky and, when comparing its historical volatility, SPCG Public is 1.14 times less risky than Ratch Group. The stock trades about -0.1 of its potential returns per unit of risk. The Ratch Group Public is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  3,250  in Ratch Group Public on September 27, 2024 and sell it today you would lose (200.00) from holding Ratch Group Public or give up 6.15% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.36%
Values	Daily Returns

SPCG Public  vs.  Ratch Group Public

SPCG Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SPCG Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company 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 somewhat strong fundamental drivers, Ratch Group is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SPCG Public and Ratch Group

The main advantage of trading using opposite SPCG Public and Ratch Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPCG Public 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 SPCG 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.

Check out your portfolio center.

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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..