Correlation Between Australian Agricultural and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Australian Agricultural and Regis Healthcare 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 Australian Agricultural and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Agricultural and Regis Healthcare, you can compare the effects of market volatilities on Australian Agricultural and Regis Healthcare 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 Australian Agricultural with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Agricultural and Regis Healthcare.
Diversification Opportunities for Australian Agricultural and Regis Healthcare
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Australian and Regis is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Australian Agricultural and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and Australian Agricultural 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 Australian Agricultural are associated (or correlated) with Regis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Healthcare has no effect on the direction of Australian Agricultural i.e., Australian Agricultural and Regis Healthcare go up and down completely randomly.
Pair Corralation between Australian Agricultural and Regis Healthcare
Assuming the 90 days trading horizon Australian Agricultural is expected to generate 8.26 times less return on investment than Regis Healthcare. But when comparing it to its historical volatility, Australian Agricultural is 1.73 times less risky than Regis Healthcare. It trades about 0.04 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 600.00 in Regis Healthcare on November 2, 2024 and sell it today you would earn a total of 41.00 from holding Regis Healthcare or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Agricultural vs. Regis Healthcare
Performance |
| Timeline |
| Australian Agricultural |
| Regis Healthcare |
Australian Agricultural and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Agricultural and Regis Healthcare
The main advantage of trading using opposite Australian Agricultural and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Agricultural position performs unexpectedly, Regis Healthcare 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 Regis Healthcare will offset losses from the drop in Regis Healthcare's long position.| Australian Agricultural vs. Clime Investment Management | Australian Agricultural vs. K2 Asset Management | Australian Agricultural vs. 29Metals | Australian Agricultural vs. Epsilon Healthcare |
| Regis Healthcare vs. EVE Health Group | Regis Healthcare vs. Fisher Paykel Healthcare | Regis Healthcare vs. MetalsGrove Mining | Regis Healthcare vs. Vitura Health 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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