Correlation Between RS Public and Lohakit Metal

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

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

Diversification Opportunities for RS Public and Lohakit Metal

-0.22

Correlation Coefficient

RS Public  Lohakit Metal

Very good diversification

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

Pair Corralation between RS Public and Lohakit Metal

Assuming the 90 days trading horizon RS Public is expected to under-perform the Lohakit Metal. In addition to that, RS Public is 6.26 times more volatile than Lohakit Metal Public. It trades about -0.23 of its total potential returns per unit of risk. Lohakit Metal Public is currently generating about 0.0 per unit of volatility. If you would invest  376.00  in Lohakit Metal Public on August 31, 2024 and sell it today you would earn a total of  0.00  from holding Lohakit Metal Public or generate 0.0% return on investment over 90 days.

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

RS Public  vs.  Lohakit Metal Public

RS Public

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RS Public are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite quite weak forward-looking signals, RS Public disclosed solid returns over the last few months and may actually be approaching a breakup point.

Lohakit Metal Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lohakit Metal Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Lohakit Metal is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with RS Public and Lohakit Metal

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

The idea behind RS Public and Lohakit Metal Public 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.