Correlation Between REGAL ASIAN and MUTUIONLINE
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and MUTUIONLINE 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 MUTUIONLINE 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 MUTUIONLINE, you can compare the effects of market volatilities on REGAL ASIAN and MUTUIONLINE 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 MUTUIONLINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and MUTUIONLINE.
Diversification Opportunities for REGAL ASIAN and MUTUIONLINE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REGAL and MUTUIONLINE is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and MUTUIONLINE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MUTUIONLINE 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 MUTUIONLINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MUTUIONLINE has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and MUTUIONLINE go up and down completely randomly.
Pair Corralation between REGAL ASIAN and MUTUIONLINE
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 5.05 times less return on investment than MUTUIONLINE. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 1.35 times less risky than MUTUIONLINE. It trades about 0.01 of its potential returns per unit of risk. MUTUIONLINE is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 3,229 in MUTUIONLINE on September 20, 2024 and sell it today you would earn a total of 646.00 from holding MUTUIONLINE or generate 20.01% 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. MUTUIONLINE
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| MUTUIONLINE |
REGAL ASIAN and MUTUIONLINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and MUTUIONLINE
The main advantage of trading using opposite REGAL ASIAN and MUTUIONLINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, MUTUIONLINE 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 MUTUIONLINE will offset losses from the drop in MUTUIONLINE's long position.| REGAL ASIAN vs. ITALIAN WINE BRANDS | REGAL ASIAN vs. Hyrican Informationssysteme Aktiengesellschaft | REGAL ASIAN vs. Datang International Power | REGAL ASIAN vs. Heidelberg Materials AG |
| MUTUIONLINE vs. EAT WELL INVESTMENT | MUTUIONLINE vs. Sims Metal Management | MUTUIONLINE vs. Apollo Investment Corp | MUTUIONLINE vs. REGAL ASIAN INVESTMENTS |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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