Correlation Between REGAL ASIAN and Virtus Investment
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Virtus Investment 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 Virtus Investment 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 Virtus Investment Partners, you can compare the effects of market volatilities on REGAL ASIAN and Virtus Investment 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 Virtus Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Virtus Investment.
Diversification Opportunities for REGAL ASIAN and Virtus Investment
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and Virtus is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Virtus Investment Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Investment 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 Virtus Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Investment has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Virtus Investment go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Virtus Investment
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Virtus Investment. But the stock apears to be less risky and, when comparing its historical volatility, REGAL ASIAN INVESTMENTS is 1.71 times less risky than Virtus Investment. The stock trades about -0.14 of its potential returns per unit of risk. The Virtus Investment Partners is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 20,375 in Virtus Investment Partners on August 31, 2024 and sell it today you would earn a total of 3,225 from holding Virtus Investment Partners or generate 15.83% 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. Virtus Investment Partners
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Virtus Investment |
REGAL ASIAN and Virtus Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Virtus Investment
The main advantage of trading using opposite REGAL ASIAN and Virtus Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Virtus Investment 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 Virtus Investment will offset losses from the drop in Virtus Investment's long position.| REGAL ASIAN vs. PICKN PAY STORES | REGAL ASIAN vs. Ross Stores | REGAL ASIAN vs. Perseus Mining Limited | REGAL ASIAN vs. GRIFFIN MINING LTD |
| Virtus Investment vs. Ameriprise Financial | Virtus Investment vs. Ares Management Corp | Virtus Investment vs. Superior Plus Corp | Virtus Investment vs. NMI Holdings |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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