Correlation Between Ras Technology and CSL

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

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

Diversification Opportunities for Ras Technology and CSL

0.67

Correlation Coefficient

Ras Technology  CSL

Poor diversification

The 3 months correlation between Ras and CSL is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and CSL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL and Ras Technology 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 Ras Technology Holdings are associated (or correlated) with CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL has no effect on the direction of Ras Technology i.e., Ras Technology and CSL go up and down completely randomly.

Pair Corralation between Ras Technology and CSL

Assuming the 90 days trading horizon Ras Technology Holdings is expected to under-perform the CSL. In addition to that, Ras Technology is 5.36 times more volatile than CSL. It trades about -0.33 of its total potential returns per unit of risk. CSL is currently generating about 0.11 per unit of volatility. If you would invest  27,245  in CSL on September 17, 2024 and sell it today you would earn a total of  510.00  from holding CSL or generate 1.87% return on investment over 90 days.

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

Ras Technology Holdings  vs.  CSL

Ras Technology Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ras Technology Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

CSL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CSL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, CSL is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Ras Technology and CSL

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

The idea behind Ras Technology Holdings and CSL 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.