Correlation Between British Amer and Regal Investment
Can any of the company-specific risk be diversified away by investing in both British Amer and Regal Investment 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 British Amer and Regal Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and Regal Investment, you can compare the effects of market volatilities on British Amer and Regal Investment 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 British Amer with a short position of Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and Regal Investment.
Diversification Opportunities for British Amer and Regal Investment
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between British and Regal is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment and British Amer 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 Bailador Technology Invest are associated (or correlated) with Regal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Investment has no effect on the direction of British Amer i.e., British Amer and Regal Investment go up and down completely randomly.
Pair Corralation between British Amer and Regal Investment
Assuming the 90 days trading horizon British Amer is expected to generate 1.98 times less return on investment than Regal Investment. But when comparing it to its historical volatility, Bailador Technology Invest is 1.13 times less risky than Regal Investment. It trades about 0.03 of its potential returns per unit of risk. Regal Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 264.00 in Regal Investment on September 3, 2024 and sell it today you would earn a total of 78.00 from holding Regal Investment or generate 29.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. Regal Investment
Performance |
| Timeline |
| Bailador Technology |
| Regal Investment |
British Amer and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and Regal Investment
The main advantage of trading using opposite British Amer and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer position performs unexpectedly, Regal Investment 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 Regal Investment will offset losses from the drop in Regal Investment's long position.| British Amer vs. Audio Pixels Holdings | British Amer vs. Iodm | British Amer vs. Nsx | British Amer vs. TTG Fintech |
| Regal Investment vs. ABACUS STORAGE KING | Regal Investment vs. Champion Iron | Regal Investment vs. iShares Global Healthcare | Regal Investment 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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