Correlation Between REGAL ASIAN and Food Life
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Food Life 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 REGAL ASIAN and Food Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and Food Life Companies, you can compare the effects of market volatilities on REGAL ASIAN and Food Life 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 REGAL ASIAN with a short position of Food Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Food Life.
Diversification Opportunities for REGAL ASIAN and Food Life
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and Food is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Food Life Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Food Life Companies and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS are associated (or correlated) with Food Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Food Life Companies has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Food Life go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Food Life
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Food Life. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 1.1 times less risky than Food Life. The stock trades about -0.08 of its potential returns per unit of risk. The Food Life Companies is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,770 in Food Life Companies on September 3, 2024 and sell it today you would earn a total of 370.00 from holding Food Life Companies or generate 20.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Food Life Companies
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Food Life Companies |
REGAL ASIAN and Food Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Food Life
The main advantage of trading using opposite REGAL ASIAN and Food Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Food Life 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 Food Life will offset losses from the drop in Food Life's long position.| REGAL ASIAN vs. Ramsay Health Care | REGAL ASIAN vs. Diamondrock Hospitality Co | REGAL ASIAN vs. BW OFFSHORE LTD | REGAL ASIAN vs. AAC TECHNOLOGHLDGADR |
| Food Life vs. McDonalds | Food Life vs. Chipotle Mexican Grill | Food Life vs. Superior Plus Corp | Food Life vs. NMI Holdings |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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