Correlation Between Reacap Financial and Alexandria New

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

By analyzing existing cross correlation between Reacap Financial Investments and Alexandria New Medical, you can compare the effects of market volatilities on Reacap Financial and Alexandria New 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 Reacap Financial with a short position of Alexandria New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reacap Financial and Alexandria New.

Diversification Opportunities for Reacap Financial and Alexandria New

0.46

Correlation Coefficient

Reacap Financial  Alexandria New

Very weak diversification

The 3 months correlation between Reacap and Alexandria is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Reacap Financial Investments and Alexandria New Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alexandria New Medical and Reacap Financial 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 Reacap Financial Investments are associated (or correlated) with Alexandria New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alexandria New Medical has no effect on the direction of Reacap Financial i.e., Reacap Financial and Alexandria New go up and down completely randomly.

Pair Corralation between Reacap Financial and Alexandria New

Assuming the 90 days trading horizon Reacap Financial Investments is expected to under-perform the Alexandria New. But the stock apears to be less risky and, when comparing its historical volatility, Reacap Financial Investments is 1.96 times less risky than Alexandria New. The stock trades about -0.07 of its potential returns per unit of risk. The Alexandria New Medical is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  2,023  in Alexandria New Medical on October 10, 2024 and sell it today you would lose (130.00) from holding Alexandria New Medical or give up 6.43% of portfolio value over 90 days.

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

Reacap Financial Investments  vs.  Alexandria New Medical

Reacap Financial Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reacap Financial Investments has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's technical and fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Alexandria New Medical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alexandria New Medical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Alexandria New is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Reacap Financial and Alexandria New

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

The idea behind Reacap Financial Investments and Alexandria New Medical 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.