Correlation Between REGAL ASIAN and SEAZEN GROUP
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and SEAZEN GROUP 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 SEAZEN GROUP 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 SEAZEN GROUP LTD, you can compare the effects of market volatilities on REGAL ASIAN and SEAZEN GROUP 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 SEAZEN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and SEAZEN GROUP.
Diversification Opportunities for REGAL ASIAN and SEAZEN GROUP
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and SEAZEN is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and SEAZEN GROUP LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEAZEN GROUP LTD 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 SEAZEN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEAZEN GROUP LTD has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and SEAZEN GROUP go up and down completely randomly.
Pair Corralation between REGAL ASIAN and SEAZEN GROUP
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 5.78 times less return on investment than SEAZEN GROUP. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 3.13 times less risky than SEAZEN GROUP. It trades about 0.0 of its potential returns per unit of risk. SEAZEN GROUP LTD is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 34.00 in SEAZEN GROUP LTD on September 24, 2024 and sell it today you would lose (12.00) from holding SEAZEN GROUP LTD or give up 35.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. SEAZEN GROUP LTD
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| SEAZEN GROUP LTD |
REGAL ASIAN and SEAZEN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and SEAZEN GROUP
The main advantage of trading using opposite REGAL ASIAN and SEAZEN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, SEAZEN GROUP 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 SEAZEN GROUP will offset losses from the drop in SEAZEN GROUP's long position.| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
| SEAZEN GROUP vs. CEOTRONICS | SEAZEN GROUP vs. Strategic Investments AS | SEAZEN GROUP vs. REGAL ASIAN INVESTMENTS | SEAZEN GROUP vs. Brockhaus Capital Management |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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