Correlation Between Austco Healthcare and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Austco Healthcare 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 Austco Healthcare and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Austco Healthcare and Regis Healthcare, you can compare the effects of market volatilities on Austco Healthcare 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 Austco Healthcare with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austco Healthcare and Regis Healthcare.
Diversification Opportunities for Austco Healthcare and Regis Healthcare
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Austco and Regis is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Austco Healthcare and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and Austco Healthcare 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 Austco Healthcare 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 Austco Healthcare i.e., Austco Healthcare and Regis Healthcare go up and down completely randomly.
Pair Corralation between Austco Healthcare and Regis Healthcare
Assuming the 90 days trading horizon Austco Healthcare is expected to generate 2.36 times less return on investment than Regis Healthcare. In addition to that, Austco Healthcare is 1.59 times more volatile than Regis Healthcare. It trades about 0.06 of its total potential returns per unit of risk. Regis Healthcare is currently generating about 0.23 per unit of volatility. If you would invest 388.00 in Regis Healthcare on August 25, 2024 and sell it today you would earn a total of 282.00 from holding Regis Healthcare or generate 72.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Austco Healthcare vs. Regis Healthcare
Performance |
| Timeline |
| Austco Healthcare |
| Regis Healthcare |
Austco Healthcare and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Austco Healthcare and Regis Healthcare
The main advantage of trading using opposite Austco Healthcare and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austco Healthcare 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.| Austco Healthcare vs. FSA Group | Austco Healthcare vs. Tamawood | Austco Healthcare vs. Cochlear | Austco Healthcare vs. Rea Group |
| Regis Healthcare vs. Inventis | Regis Healthcare vs. PM Capital Global | Regis Healthcare vs. Macquarie Group Ltd | Regis Healthcare vs. Wam Leaders |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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