Correlation Between R S and Refex Industries

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

By analyzing existing cross correlation between R S Software and Refex Industries Limited, you can compare the effects of market volatilities on R S and Refex Industries 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 R S with a short position of Refex Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of R S and Refex Industries.

Diversification Opportunities for R S and Refex Industries

-0.03

Correlation Coefficient

R S  Refex Industries

Good diversification

The 3 months correlation between RSSOFTWARE and Refex is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding R S Software and Refex Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Refex Industries and R S 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 R S Software are associated (or correlated) with Refex Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Refex Industries has no effect on the direction of R S i.e., R S and Refex Industries go up and down completely randomly.

Pair Corralation between R S and Refex Industries

Assuming the 90 days trading horizon R S Software is expected to under-perform the Refex Industries. In addition to that, R S is 1.35 times more volatile than Refex Industries Limited. It trades about -0.2 of its total potential returns per unit of risk. Refex Industries Limited is currently generating about -0.06 per unit of volatility. If you would invest  50,285  in Refex Industries Limited on October 20, 2024 and sell it today you would lose (1,895) from holding Refex Industries Limited or give up 3.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

R S Software  vs.  Refex Industries Limited

R S Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days R S Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting 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.

Refex Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Refex Industries Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical and fundamental indicators, Refex Industries is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with R S and Refex Industries

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

The idea behind R S Software and Refex Industries Limited 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..