Correlation Between GRIT REAL and RHT HOLDING

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

By analyzing existing cross correlation between GRIT REAL ESTATE and RHT HOLDING LTD, you can compare the effects of market volatilities on GRIT REAL and RHT HOLDING 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 GRIT REAL with a short position of RHT HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIT REAL and RHT HOLDING.

Diversification Opportunities for GRIT REAL and RHT HOLDING

0.14

Correlation Coefficient

GRIT REAL  RHT HOLDING

Average diversification

The 3 months correlation between GRIT and RHT is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding GRIT REAL ESTATE and RHT HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RHT HOLDING LTD and GRIT REAL 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 GRIT REAL ESTATE are associated (or correlated) with RHT HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RHT HOLDING LTD has no effect on the direction of GRIT REAL i.e., GRIT REAL and RHT HOLDING go up and down completely randomly.

Pair Corralation between GRIT REAL and RHT HOLDING

Assuming the 90 days trading horizon GRIT REAL ESTATE is expected to under-perform the RHT HOLDING. In addition to that, GRIT REAL is 14.54 times more volatile than RHT HOLDING LTD. It trades about -0.15 of its total potential returns per unit of risk. RHT HOLDING LTD is currently generating about -0.13 per unit of volatility. If you would invest  1,650  in RHT HOLDING LTD on April 22, 2025 and sell it today you would lose (40.00) from holding RHT HOLDING LTD or give up 2.42% of portfolio value over 90 days.

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

GRIT REAL ESTATE  vs.  RHT HOLDING LTD

GRIT REAL ESTATE

Risk-Adjusted Performance

Very Weak

Over the last 90 days GRIT REAL ESTATE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

RHT HOLDING LTD

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GRIT REAL and RHT HOLDING

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

The idea behind GRIT REAL ESTATE and RHT HOLDING LTD 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.