Correlation Between Air New and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Air New 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 Air New and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air New Zealand and Regis Healthcare, you can compare the effects of market volatilities on Air New 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 Air New with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air New and Regis Healthcare.
Diversification Opportunities for Air New and Regis Healthcare
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Air and Regis is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Air New Zealand and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and Air New 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 Air New Zealand 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 Air New i.e., Air New and Regis Healthcare go up and down completely randomly.
Pair Corralation between Air New and Regis Healthcare
Assuming the 90 days trading horizon Air New is expected to generate 30.7 times less return on investment than Regis Healthcare. But when comparing it to its historical volatility, Air New Zealand is 1.53 times less risky than Regis Healthcare. It trades about 0.01 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 646.00 in Regis Healthcare on August 25, 2024 and sell it today you would earn a total of 24.00 from holding Regis Healthcare or generate 3.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Air New Zealand vs. Regis Healthcare
Performance |
| Timeline |
| Air New Zealand |
| Regis Healthcare |
Air New and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Air New and Regis Healthcare
The main advantage of trading using opposite Air New and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air New 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.| Air New vs. Bio Gene Technology | Air New vs. Computershare | Air New vs. Hutchison Telecommunications | Air New vs. BTC Health Limited |
| 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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