Correlation Between Ritchie Bros and Transcontinental

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

Diversification Opportunities for Ritchie Bros and Transcontinental

-0.05

Correlation Coefficient

Ritchie Bros  Transcontinental

Good diversification

The 3 months correlation between Ritchie and Transcontinental is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ritchie Bros Auctioneers and Transcontinental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transcontinental 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 Transcontinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transcontinental has no effect on the direction of Ritchie Bros i.e., Ritchie Bros and Transcontinental go up and down completely randomly.

Pair Corralation between Ritchie Bros and Transcontinental

Assuming the 90 days trading horizon Ritchie Bros Auctioneers is expected to under-perform the Transcontinental. In addition to that, Ritchie Bros is 1.11 times more volatile than Transcontinental. It trades about -0.24 of its total potential returns per unit of risk. Transcontinental is currently generating about -0.01 per unit of volatility. If you would invest  1,923  in Transcontinental on July 15, 2025 and sell it today you would lose (14.00) from holding Transcontinental or give up 0.73% of portfolio value over 90 days.

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

Ritchie Bros Auctioneers  vs.  Transcontinental

Ritchie Bros Auctioneers

Risk-Adjusted Performance

Weakest

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

Transcontinental

Risk-Adjusted Performance

Weakest

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

Pair Trading with Ritchie Bros and Transcontinental

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

The idea behind Ritchie Bros Auctioneers and Transcontinental 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.