Correlation Between REGAL ASIAN and Automatic Data
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Automatic Data 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 Automatic Data 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 Automatic Data Processing, you can compare the effects of market volatilities on REGAL ASIAN and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Automatic Data.
Diversification Opportunities for REGAL ASIAN and Automatic Data
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and Automatic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Automatic Data go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Automatic Data
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Automatic Data. In addition to that, REGAL ASIAN is 1.22 times more volatile than Automatic Data Processing. It trades about -0.21 of its total potential returns per unit of risk. Automatic Data Processing is currently generating about 0.32 per unit of volatility. If you would invest 26,815 in Automatic Data Processing on September 1, 2024 and sell it today you would earn a total of 2,295 from holding Automatic Data Processing or generate 8.56% 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. Automatic Data Processing
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Automatic Data Processing |
REGAL ASIAN and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Automatic Data
The main advantage of trading using opposite REGAL ASIAN and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| REGAL ASIAN vs. PennantPark Investment | REGAL ASIAN vs. SEI INVESTMENTS | REGAL ASIAN vs. MARKET VECTR RETAIL | REGAL ASIAN vs. Strategic Investments AS |
| Automatic Data vs. Global Ship Lease | Automatic Data vs. BOSTON BEER A | Automatic Data vs. National Beverage Corp | Automatic Data vs. Digilife Technologies Limited |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |