Correlation Between Raval ACS and Tadir Gan

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

By analyzing existing cross correlation between Raval ACS and Tadir Gan 1993, you can compare the effects of market volatilities on Raval ACS and Tadir Gan 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 Raval ACS with a short position of Tadir Gan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Raval ACS and Tadir Gan.

Diversification Opportunities for Raval ACS and Tadir Gan

0.4

Correlation Coefficient

Raval ACS  Tadir Gan

Very weak diversification

The 3 months correlation between Raval and Tadir is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Raval ACS and Tadir Gan 1993 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tadir Gan 1993 and Raval ACS 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 Raval ACS are associated (or correlated) with Tadir Gan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tadir Gan 1993 has no effect on the direction of Raval ACS i.e., Raval ACS and Tadir Gan go up and down completely randomly.

Pair Corralation between Raval ACS and Tadir Gan

Assuming the 90 days trading horizon Raval ACS is expected to under-perform the Tadir Gan. But the stock apears to be less risky and, when comparing its historical volatility, Raval ACS is 1.16 times less risky than Tadir Gan. The stock trades about -0.03 of its potential returns per unit of risk. The Tadir Gan 1993 is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  22,700  in Tadir Gan 1993 on September 12, 2024 and sell it today you would lose (4,450) from holding Tadir Gan 1993 or give up 19.6% of portfolio value over 90 days.

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

Raval ACS  vs.  Tadir Gan 1993

Raval ACS

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raval ACS are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak essential indicators, Raval ACS sustained solid returns over the last few months and may actually be approaching a breakup point.

Tadir Gan 1993

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tadir Gan 1993 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Tadir Gan is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Raval ACS and Tadir Gan

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

The idea behind Raval ACS and Tadir Gan 1993 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.