Correlation Between Raytech Holding and ATRenew

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

By analyzing existing cross correlation between Raytech Holding Limited and ATRenew Inc DRC, you can compare the effects of market volatilities on Raytech Holding and ATRenew 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 Raytech Holding with a short position of ATRenew. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raytech Holding and ATRenew.

Diversification Opportunities for Raytech Holding and ATRenew

-0.08

Correlation Coefficient

Raytech Holding  ATRenew

Good diversification

The 3 months correlation between Raytech and ATRenew is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Raytech Holding Limited and ATRenew Inc DRC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRenew Inc DRC and Raytech Holding 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 Raytech Holding Limited are associated (or correlated) with ATRenew. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRenew Inc DRC has no effect on the direction of Raytech Holding i.e., Raytech Holding and ATRenew go up and down completely randomly.

Pair Corralation between Raytech Holding and ATRenew

Considering the 90-day investment horizon Raytech Holding Limited is expected to generate 3.36 times more return on investment than ATRenew. However, Raytech Holding is 3.36 times more volatile than ATRenew Inc DRC. It trades about 0.09 of its potential returns per unit of risk. ATRenew Inc DRC is currently generating about 0.02 per unit of risk. If you would invest  138.00  in Raytech Holding Limited on December 29, 2024 and sell it today you would earn a total of  54.00  from holding Raytech Holding Limited or generate 39.13% return on investment over 90 days.

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

Raytech Holding Limited  vs.  ATRenew Inc DRC

Raytech Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Raytech Holding Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, Raytech Holding showed solid returns over the last few months and may actually be approaching a breakup point.

ATRenew Inc DRC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ATRenew Inc DRC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, ATRenew may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Raytech Holding and ATRenew

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

The idea behind Raytech Holding Limited and ATRenew Inc DRC 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.