Correlation Between Richtech Robotics and Small Cap

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

Diversification Opportunities for Richtech Robotics and Small Cap

0.68

Correlation Coefficient

Richtech Robotics  Small Cap

Poor diversification

The 3 months correlation between Richtech and Small is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Richtech Robotics Class and Small Cap Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Stock 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 Small Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Stock has no effect on the direction of Richtech Robotics i.e., Richtech Robotics and Small Cap go up and down completely randomly.

Pair Corralation between Richtech Robotics and Small Cap

Allowing for the 90-day total investment horizon Richtech Robotics Class is expected to generate 6.77 times more return on investment than Small Cap. However, Richtech Robotics is 6.77 times more volatile than Small Cap Stock. It trades about 0.15 of its potential returns per unit of risk. Small Cap Stock is currently generating about 0.18 per unit of risk. If you would invest  182.00  in Richtech Robotics Class on July 18, 2025 and sell it today you would earn a total of  385.00  from holding Richtech Robotics Class or generate 211.54% return on investment over 90 days.

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

Richtech Robotics Class  vs.  Small Cap Stock

Richtech Robotics Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Richtech Robotics Class are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Even with relatively fragile basic indicators, Richtech Robotics reported solid returns over the last few months and may actually be approaching a breakup point.

Small Cap Stock

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Small Cap Stock are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Small Cap may actually be approaching a critical reversion point that can send shares even higher in November 2025.

Pair Trading with Richtech Robotics and Small Cap

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

The idea behind Richtech Robotics Class and Small Cap Stock 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.