Correlation Between Ras Technology and WiseTech Global

Can any of the company-specific risk be diversified away by investing in both Ras Technology and WiseTech Global 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 WiseTech Global 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 WiseTech Global Limited, you can compare the effects of market volatilities on Ras Technology and WiseTech Global 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 WiseTech Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ras Technology and WiseTech Global.

Diversification Opportunities for Ras Technology and WiseTech Global

-0.16

Correlation Coefficient

Ras Technology  WiseTech Global

Good diversification

The 3 months correlation between Ras and WiseTech is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ras Technology Holdings and WiseTech Global Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WiseTech Global 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 WiseTech Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WiseTech Global has no effect on the direction of Ras Technology i.e., Ras Technology and WiseTech Global go up and down completely randomly.

Pair Corralation between Ras Technology and WiseTech Global

Assuming the 90 days trading horizon Ras Technology Holdings is expected to under-perform the WiseTech Global. In addition to that, Ras Technology is 1.52 times more volatile than WiseTech Global Limited. It trades about -0.22 of its total potential returns per unit of risk. WiseTech Global Limited is currently generating about 0.07 per unit of volatility. If you would invest  11,200  in WiseTech Global Limited on October 25, 2024 and sell it today you would earn a total of  1,046  from holding WiseTech Global Limited or generate 9.34% return on investment over 90 days.

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

Ras Technology Holdings  vs.  WiseTech Global Limited

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 February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

WiseTech Global

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in WiseTech Global Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, WiseTech Global may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ras Technology and WiseTech Global

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

The idea behind Ras Technology Holdings and WiseTech Global 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.

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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.