Correlation Between Ritchie Bros and Altus Group
Can any of the company-specific risk be diversified away by investing in both Ritchie Bros and Altus 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 Ritchie Bros and Altus Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ritchie Bros Auctioneers and Altus Group Limited, you can compare the effects of market volatilities on Ritchie Bros and Altus 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 Ritchie Bros with a short position of Altus Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ritchie Bros and Altus Group.
Diversification Opportunities for Ritchie Bros and Altus Group
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ritchie and Altus is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ritchie Bros Auctioneers and Altus Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Altus Group Limited and Ritchie Bros 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 Ritchie Bros Auctioneers are associated (or correlated) with Altus Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Altus Group Limited has no effect on the direction of Ritchie Bros i.e., Ritchie Bros and Altus Group go up and down completely randomly.
Pair Corralation between Ritchie Bros and Altus Group
Assuming the 90 days trading horizon Ritchie Bros Auctioneers is expected to generate 1.21 times more return on investment than Altus Group. However, Ritchie Bros is 1.21 times more volatile than Altus Group Limited. It trades about 0.1 of its potential returns per unit of risk. Altus Group Limited is currently generating about -0.11 per unit of risk. If you would invest 13,621 in Ritchie Bros Auctioneers on December 1, 2024 and sell it today you would earn a total of 1,177 from holding Ritchie Bros Auctioneers or generate 8.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Ritchie Bros Auctioneers vs. Altus Group Limited
Performance |
Timeline |
Ritchie Bros Auctioneers |
Altus Group Limited |
Ritchie Bros and Altus Group Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ritchie Bros and Altus Group
The main advantage of trading using opposite Ritchie Bros and Altus Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ritchie Bros position performs unexpectedly, Altus 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 Altus Group will offset losses from the drop in Altus Group's long position.Ritchie Bros vs. Toromont Industries | Ritchie Bros vs. Stantec | Ritchie Bros vs. Finning International | Ritchie Bros vs. FirstService Corp |
Altus Group vs. Colliers International Group | Altus Group vs. FirstService Corp | Altus Group vs. Winpak | Altus Group vs. Ritchie Bros Auctioneers |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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