Correlation Between JE Cleantech and Richtech Robotics

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

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

Diversification Opportunities for JE Cleantech and Richtech Robotics

-0.14

Correlation Coefficient

JE Cleantech  Richtech Robotics

Good diversification

The 3 months correlation between JCSE and Richtech is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding JE Cleantech Holdings and Richtech Robotics Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Richtech Robotics Class and JE Cleantech 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 JE Cleantech Holdings are associated (or correlated) with Richtech Robotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Richtech Robotics Class has no effect on the direction of JE Cleantech i.e., JE Cleantech and Richtech Robotics go up and down completely randomly.

Pair Corralation between JE Cleantech and Richtech Robotics

Given the investment horizon of 90 days JE Cleantech Holdings is expected to generate 1.92 times more return on investment than Richtech Robotics. However, JE Cleantech is 1.92 times more volatile than Richtech Robotics Class. It trades about 0.1 of its potential returns per unit of risk. Richtech Robotics Class is currently generating about -0.1 per unit of risk. If you would invest  114.00  in JE Cleantech Holdings on September 5, 2024 and sell it today you would earn a total of  51.00  from holding JE Cleantech Holdings or generate 44.74% return on investment over 90 days.

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

JE Cleantech Holdings  vs.  Richtech Robotics Class

JE Cleantech Holdings

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JE Cleantech Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, JE Cleantech exhibited solid returns over the last few months and may actually be approaching a breakup point.

Richtech Robotics Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Richtech Robotics Class has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with JE Cleantech and Richtech Robotics

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

The idea behind JE Cleantech Holdings and Richtech Robotics 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.