Correlation Between REGAL ASIAN and MSAD INSURANCE
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and MSAD INSURANCE 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 MSAD INSURANCE 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 MSAD INSURANCE, you can compare the effects of market volatilities on REGAL ASIAN and MSAD INSURANCE 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 MSAD INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and MSAD INSURANCE.
Diversification Opportunities for REGAL ASIAN and MSAD INSURANCE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between REGAL and MSAD is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and MSAD INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSAD INSURANCE 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 MSAD INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSAD INSURANCE has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and MSAD INSURANCE go up and down completely randomly.
Pair Corralation between REGAL ASIAN and MSAD INSURANCE
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 3.5 times less return on investment than MSAD INSURANCE. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 1.15 times less risky than MSAD INSURANCE. It trades about 0.03 of its potential returns per unit of risk. MSAD INSURANCE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,060 in MSAD INSURANCE on November 28, 2024 and sell it today you would earn a total of 880.00 from holding MSAD INSURANCE or generate 83.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. MSAD INSURANCE
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| MSAD INSURANCE |
REGAL ASIAN and MSAD INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and MSAD INSURANCE
The main advantage of trading using opposite REGAL ASIAN and MSAD INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, MSAD INSURANCE 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 MSAD INSURANCE will offset losses from the drop in MSAD INSURANCE's long position.| REGAL ASIAN vs. Richardson Electronics | REGAL ASIAN vs. METHODE ELECTRONICS | REGAL ASIAN vs. STMicroelectronics NV | REGAL ASIAN vs. Agilent Technologies |
| MSAD INSURANCE vs. Apple Inc | MSAD INSURANCE vs. Apple Inc | MSAD INSURANCE vs. Apple Inc | MSAD INSURANCE vs. Apple Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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