Correlation Between Rimon Consulting and Augwind Energy

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

By analyzing existing cross correlation between Rimon Consulting Management and Augwind Energy Tech, you can compare the effects of market volatilities on Rimon Consulting and Augwind Energy 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 Rimon Consulting with a short position of Augwind Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rimon Consulting and Augwind Energy.

Diversification Opportunities for Rimon Consulting and Augwind Energy

-0.05

Correlation Coefficient

Rimon Consulting  Augwind Energy

Good diversification

The 3 months correlation between Rimon and Augwind is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Rimon Consulting Management and Augwind Energy Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Augwind Energy Tech and Rimon Consulting 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 Rimon Consulting Management are associated (or correlated) with Augwind Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Augwind Energy Tech has no effect on the direction of Rimon Consulting i.e., Rimon Consulting and Augwind Energy go up and down completely randomly.

Pair Corralation between Rimon Consulting and Augwind Energy

Assuming the 90 days trading horizon Rimon Consulting Management is expected to generate 0.7 times more return on investment than Augwind Energy. However, Rimon Consulting Management is 1.42 times less risky than Augwind Energy. It trades about -0.06 of its potential returns per unit of risk. Augwind Energy Tech is currently generating about -0.15 per unit of risk. If you would invest  426,900  in Rimon Consulting Management on December 30, 2024 and sell it today you would lose (39,100) from holding Rimon Consulting Management or give up 9.16% of portfolio value over 90 days.

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

Rimon Consulting Management  vs.  Augwind Energy Tech

Rimon Consulting Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Rimon Consulting Management has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Augwind Energy Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Augwind Energy Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Rimon Consulting and Augwind Energy

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

The idea behind Rimon Consulting Management and Augwind Energy Tech 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.