Correlation Between Richtech Robotics and Ametek

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

By analyzing existing cross correlation between Richtech Robotics Class and Ametek Inc, you can compare the effects of market volatilities on Richtech Robotics and Ametek 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 Richtech Robotics with a short position of Ametek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richtech Robotics and Ametek.

Diversification Opportunities for Richtech Robotics and Ametek

-0.22

Correlation Coefficient

Richtech Robotics  Ametek

Very good diversification

The 3 months correlation between Richtech and Ametek is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Richtech Robotics Class and Ametek Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ametek Inc and Richtech Robotics 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 Richtech Robotics Class are associated (or correlated) with Ametek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ametek Inc has no effect on the direction of Richtech Robotics i.e., Richtech Robotics and Ametek go up and down completely randomly.

Pair Corralation between Richtech Robotics and Ametek

Allowing for the 90-day total investment horizon Richtech Robotics Class is expected to generate 14.86 times more return on investment than Ametek. However, Richtech Robotics is 14.86 times more volatile than Ametek Inc. It trades about 0.42 of its potential returns per unit of risk. Ametek Inc is currently generating about -0.22 per unit of risk. If you would invest  55.00  in Richtech Robotics Class on September 18, 2024 and sell it today you would earn a total of  68.00  from holding Richtech Robotics Class or generate 123.64% return on investment over 90 days.

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

Richtech Robotics Class  vs.  Ametek Inc

Richtech Robotics Class

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Richtech Robotics Class are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Richtech Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Ametek Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ametek Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak primary indicators, Ametek may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Richtech Robotics and Ametek

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

The idea behind Richtech Robotics Class and Ametek Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.