Correlation Between Ritchie Bros and Precious Metals

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

By analyzing existing cross correlation between Ritchie Bros Auctioneers and Precious Metals And, you can compare the effects of market volatilities on Ritchie Bros and Precious Metals 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 Ritchie Bros with a short position of Precious Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ritchie Bros and Precious Metals.

Diversification Opportunities for Ritchie Bros and Precious Metals

0.45

Correlation Coefficient

Ritchie Bros  Precious Metals

Very weak diversification

The 3 months correlation between Ritchie and Precious is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ritchie Bros Auctioneers and Precious Metals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Precious Metals And and Ritchie Bros 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 Ritchie Bros Auctioneers are associated (or correlated) with Precious Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Precious Metals And has no effect on the direction of Ritchie Bros i.e., Ritchie Bros and Precious Metals go up and down completely randomly.

Pair Corralation between Ritchie Bros and Precious Metals

Assuming the 90 days trading horizon Ritchie Bros Auctioneers is expected to generate 0.88 times more return on investment than Precious Metals. However, Ritchie Bros Auctioneers is 1.14 times less risky than Precious Metals. It trades about 0.15 of its potential returns per unit of risk. Precious Metals And is currently generating about 0.09 per unit of risk. If you would invest  14,325  in Ritchie Bros Auctioneers on April 23, 2025 and sell it today you would earn a total of  443.00  from holding Ritchie Bros Auctioneers or generate 3.09% return on investment over 90 days.

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

Ritchie Bros Auctioneers  vs.  Precious Metals And

Ritchie Bros Auctioneers

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ritchie Bros Auctioneers are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Ritchie Bros may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Precious Metals And

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Precious Metals And are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal basic indicators, Precious Metals sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ritchie Bros and Precious Metals

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

The idea behind Ritchie Bros Auctioneers and Precious Metals And 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 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..