Correlation Between BKI Investment and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both BKI Investment 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 BKI Investment and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BKI Investment and Regis Healthcare, you can compare the effects of market volatilities on BKI Investment 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 BKI Investment with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of BKI Investment and Regis Healthcare.
Diversification Opportunities for BKI Investment and Regis Healthcare
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BKI and Regis is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding BKI Investment and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and BKI Investment 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 BKI Investment 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 BKI Investment i.e., BKI Investment and Regis Healthcare go up and down completely randomly.
Pair Corralation between BKI Investment and Regis Healthcare
Assuming the 90 days trading horizon BKI Investment is expected to generate 13.41 times less return on investment than Regis Healthcare. But when comparing it to its historical volatility, BKI Investment is 2.46 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 0.21 of returns per unit of risk over similar time horizon. If you would invest 392.00 in Regis Healthcare on August 29, 2024 and sell it today you would earn a total of 258.00 from holding Regis Healthcare or generate 65.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BKI Investment vs. Regis Healthcare
Performance |
| Timeline |
| BKI Investment |
| Regis Healthcare |
BKI Investment and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BKI Investment and Regis Healthcare
The main advantage of trading using opposite BKI Investment and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BKI Investment 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.| BKI Investment vs. GQG Partners DRC | BKI Investment vs. MFF Capital Investments | BKI Investment vs. Metrics Master Income | BKI Investment vs. Australian United Investment |
| Regis Healthcare vs. Westpac Banking | Regis Healthcare vs. Champion Iron | Regis Healthcare vs. Ridley | Regis Healthcare vs. Peel Mining |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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