Correlation Between Rea and Anteris Technologies

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

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

Diversification Opportunities for Rea and Anteris Technologies

-0.35

Correlation Coefficient

Rea  Anteris Technologies

Very good diversification

The 3 months correlation between Rea and Anteris is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Rea Group and Anteris Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anteris Technologies and Rea 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 Rea Group are associated (or correlated) with Anteris Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anteris Technologies has no effect on the direction of Rea i.e., Rea and Anteris Technologies go up and down completely randomly.

Pair Corralation between Rea and Anteris Technologies

Assuming the 90 days trading horizon Rea Group is expected to generate 0.58 times more return on investment than Anteris Technologies. However, Rea Group is 1.72 times less risky than Anteris Technologies. It trades about 0.09 of its potential returns per unit of risk. Anteris Technologies is currently generating about -0.06 per unit of risk. If you would invest  14,099  in Rea Group on October 22, 2024 and sell it today you would earn a total of  8,913  from holding Rea Group or generate 63.22% return on investment over 90 days.

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

Rea Group  vs.  Anteris Technologies

Rea Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rea Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Rea is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Anteris Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anteris Technologies 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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Rea and Anteris Technologies

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

The idea behind Rea Group and Anteris Technologies 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.

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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.