Correlation Between ECHO INVESTMENT and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both ECHO INVESTMENT and REGAL ASIAN 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 ECHO INVESTMENT and REGAL ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECHO INVESTMENT ZY and REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on ECHO INVESTMENT and REGAL ASIAN 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 ECHO INVESTMENT with a short position of REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECHO INVESTMENT and REGAL ASIAN.
Diversification Opportunities for ECHO INVESTMENT and REGAL ASIAN
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ECHO and REGAL is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding ECHO INVESTMENT ZY and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS and ECHO INVESTMENT 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 ECHO INVESTMENT ZY are associated (or correlated) with REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of ECHO INVESTMENT i.e., ECHO INVESTMENT and REGAL ASIAN go up and down completely randomly.
Pair Corralation between ECHO INVESTMENT and REGAL ASIAN
Assuming the 90 days horizon ECHO INVESTMENT ZY is expected to under-perform the REGAL ASIAN. In addition to that, ECHO INVESTMENT is 1.2 times more volatile than REGAL ASIAN INVESTMENTS. It trades about -0.05 of its total potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.08 per unit of volatility. If you would invest 129.00 in REGAL ASIAN INVESTMENTS on August 28, 2024 and sell it today you would earn a total of 3.00 from holding REGAL ASIAN INVESTMENTS or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECHO INVESTMENT ZY vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| ECHO INVESTMENT ZY |
| REGAL ASIAN INVESTMENTS |
ECHO INVESTMENT and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECHO INVESTMENT and REGAL ASIAN
The main advantage of trading using opposite ECHO INVESTMENT and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECHO INVESTMENT position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| ECHO INVESTMENT vs. Superior Plus Corp | ECHO INVESTMENT vs. NMI Holdings | ECHO INVESTMENT vs. Origin Agritech | ECHO INVESTMENT vs. SIVERS SEMICONDUCTORS AB |
| REGAL ASIAN vs. Choice Hotels International | REGAL ASIAN vs. Meli Hotels International | REGAL ASIAN vs. InterContinental Hotels Group | REGAL ASIAN vs. METHODE ELECTRONICS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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