Correlation Between Raketech Group and Arctic Blue

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

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

Diversification Opportunities for Raketech Group and Arctic Blue

0.92

Correlation Coefficient

Raketech Group  Arctic Blue

Almost no diversification

The 3 months correlation between Raketech and Arctic is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Raketech Group Holding and Arctic Blue Beverages in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arctic Blue Beverages and Raketech Group 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 Raketech Group Holding are associated (or correlated) with Arctic Blue. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arctic Blue Beverages has no effect on the direction of Raketech Group i.e., Raketech Group and Arctic Blue go up and down completely randomly.

Pair Corralation between Raketech Group and Arctic Blue

Assuming the 90 days trading horizon Raketech Group Holding is expected to generate 1.29 times more return on investment than Arctic Blue. However, Raketech Group is 1.29 times more volatile than Arctic Blue Beverages. It trades about -0.15 of its potential returns per unit of risk. Arctic Blue Beverages is currently generating about -0.34 per unit of risk. If you would invest  732.00  in Raketech Group Holding on September 15, 2024 and sell it today you would lose (291.00) from holding Raketech Group Holding or give up 39.75% of portfolio value over 90 days.

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

Raketech Group Holding  vs.  Arctic Blue Beverages

Raketech Group Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Raketech Group Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Arctic Blue Beverages

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arctic Blue Beverages has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Raketech Group and Arctic Blue

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

The idea behind Raketech Group Holding and Arctic Blue Beverages 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.