Correlation Between REGAL ASIAN and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on REGAL ASIAN and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Universal Entertainment.
Diversification Opportunities for REGAL ASIAN and Universal Entertainment
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between REGAL and Universal is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Universal Entertainment go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Universal Entertainment
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.59 times more return on investment than Universal Entertainment. However, REGAL ASIAN INVESTMENTS is 1.71 times less risky than Universal Entertainment. It trades about 0.01 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.06 per unit of risk. If you would invest 117.00 in REGAL ASIAN INVESTMENTS on September 14, 2024 and sell it today you would earn a total of 4.00 from holding REGAL ASIAN INVESTMENTS or generate 3.42% 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. Universal Entertainment
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Universal Entertainment |
REGAL ASIAN and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Universal Entertainment
The main advantage of trading using opposite REGAL ASIAN and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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