Correlation Between Andean Silver and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Andean Silver 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 Andean Silver and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Andean Silver Limited and Regis Healthcare, you can compare the effects of market volatilities on Andean Silver 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 Andean Silver with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Andean Silver and Regis Healthcare.
Diversification Opportunities for Andean Silver and Regis Healthcare
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Andean and Regis is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Andean Silver Limited and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and Andean Silver 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 Andean Silver Limited 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 Andean Silver i.e., Andean Silver and Regis Healthcare go up and down completely randomly.
Pair Corralation between Andean Silver and Regis Healthcare
Assuming the 90 days trading horizon Andean Silver Limited is expected to generate 2.8 times more return on investment than Regis Healthcare. However, Andean Silver is 2.8 times more volatile than Regis Healthcare. It trades about 0.09 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.21 per unit of risk. If you would invest 64.00 in Andean Silver Limited on September 3, 2024 and sell it today you would earn a total of 36.00 from holding Andean Silver Limited or generate 56.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Andean Silver Limited vs. Regis Healthcare
Performance |
| Timeline |
| Andean Silver Limited |
| Regis Healthcare |
Andean Silver and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Andean Silver and Regis Healthcare
The main advantage of trading using opposite Andean Silver and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Andean Silver 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.| Andean Silver vs. Northern Star Resources | Andean Silver vs. Evolution Mining | Andean Silver vs. Bluescope Steel | Andean Silver vs. Aneka Tambang Tbk |
| Regis Healthcare vs. Rio Tinto | Regis Healthcare vs. Commonwealth Bank of | Regis Healthcare vs. Commonwealth Bank of | Regis Healthcare vs. Champion Iron |
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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