Correlation Between Richtech Robotics and Flowserve

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

By analyzing existing cross correlation between Richtech Robotics Class and Flowserve, you can compare the effects of market volatilities on Richtech Robotics and Flowserve 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 Richtech Robotics with a short position of Flowserve. Check out your portfolio center. Please also check ongoing floating volatility patterns of Richtech Robotics and Flowserve.

Diversification Opportunities for Richtech Robotics and Flowserve

0.7

Correlation Coefficient

Richtech Robotics  Flowserve

Poor diversification

The 3 months correlation between Richtech and Flowserve is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Richtech Robotics Class and Flowserve in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowserve and Richtech Robotics 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 Richtech Robotics Class are associated (or correlated) with Flowserve. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowserve has no effect on the direction of Richtech Robotics i.e., Richtech Robotics and Flowserve go up and down completely randomly.

Pair Corralation between Richtech Robotics and Flowserve

Allowing for the 90-day total investment horizon Richtech Robotics Class is expected to generate 2.68 times more return on investment than Flowserve. However, Richtech Robotics is 2.68 times more volatile than Flowserve. It trades about 0.03 of its potential returns per unit of risk. Flowserve is currently generating about -0.1 per unit of risk. If you would invest  236.00  in Richtech Robotics Class on February 3, 2025 and sell it today you would lose (18.00) from holding Richtech Robotics Class or give up 7.63% of portfolio value over 90 days.

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

Richtech Robotics Class  vs.  Flowserve

Richtech Robotics Class

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Richtech Robotics Class are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively conflicting basic indicators, Richtech Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Flowserve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Flowserve has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Richtech Robotics and Flowserve

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

The idea behind Richtech Robotics Class and Flowserve 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.

Check out your portfolio center.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.