Correlation Between Reliq Health and Rocky Mountain

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

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

Diversification Opportunities for Reliq Health and Rocky Mountain

0.0

Correlation Coefficient

Reliq Health  Rocky Mountain

Pay attention - limited upside

The 3 months correlation between Reliq and Rocky is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Reliq Health Technologies and Rocky Mountain Liquor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rocky Mountain Liquor and Reliq Health 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 Reliq Health Technologies are associated (or correlated) with Rocky Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rocky Mountain Liquor has no effect on the direction of Reliq Health i.e., Reliq Health and Rocky Mountain go up and down completely randomly.

Pair Corralation between Reliq Health and Rocky Mountain

Assuming the 90 days horizon Reliq Health Technologies is expected to under-perform the Rocky Mountain. But the stock apears to be less risky and, when comparing its historical volatility, Reliq Health Technologies is 1.54 times less risky than Rocky Mountain. The stock trades about -0.03 of its potential returns per unit of risk. The Rocky Mountain Liquor is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Rocky Mountain Liquor on October 9, 2024 and sell it today you would lose (4.00) from holding Rocky Mountain Liquor or give up 28.57% of portfolio value over 90 days.

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

Reliq Health Technologies  vs.  Rocky Mountain Liquor

Reliq Health Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reliq Health Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Reliq Health is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Rocky Mountain Liquor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rocky Mountain Liquor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Reliq Health and Rocky Mountain

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

The idea behind Reliq Health Technologies and Rocky Mountain Liquor 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.