Correlation Between Frp Holdings and Rafael Holdings

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

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

Diversification Opportunities for Frp Holdings and Rafael Holdings

0.44

Correlation Coefficient

Frp Holdings  Rafael Holdings

Very weak diversification

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

Pair Corralation between Frp Holdings and Rafael Holdings

Given the investment horizon of 90 days Frp Holdings Ord is expected to under-perform the Rafael Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Frp Holdings Ord is 2.27 times less risky than Rafael Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Rafael Holdings Class is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  159.00  in Rafael Holdings Class on December 27, 2024 and sell it today you would earn a total of  47.00  from holding Rafael Holdings Class or generate 29.56% return on investment over 90 days.

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

Frp Holdings Ord  vs.  Rafael Holdings Class

Frp Holdings Ord

Risk-Adjusted Performance

Very Weak

Over the last 90 days Frp Holdings Ord has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Frp Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Rafael Holdings Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Rafael Holdings Class are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Rafael Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Frp Holdings and Rafael Holdings

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

The idea behind Frp Holdings Ord and Rafael Holdings Class 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.