Correlation Between CSL and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both CSL 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 CSL and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CSL and Regis Healthcare, you can compare the effects of market volatilities on CSL 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 CSL with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of CSL and Regis Healthcare.
Diversification Opportunities for CSL and Regis Healthcare
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CSL and Regis is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding CSL and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and CSL 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 CSL 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 CSL i.e., CSL and Regis Healthcare go up and down completely randomly.
Pair Corralation between CSL and Regis Healthcare
Assuming the 90 days trading horizon CSL is expected to under-perform the Regis Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, CSL is 1.66 times less risky than Regis Healthcare. The stock trades about -0.06 of its potential returns per unit of risk. The Regis Healthcare is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 649.00 in Regis Healthcare on September 1, 2024 and sell it today you would earn a total of 19.00 from holding Regis Healthcare or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CSL vs. Regis Healthcare
Performance |
| Timeline |
| CSL |
| Regis Healthcare |
CSL and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CSL and Regis Healthcare
The main advantage of trading using opposite CSL and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CSL 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.| CSL vs. Aneka Tambang Tbk | CSL vs. Commonwealth Bank | CSL vs. Commonwealth Bank of | CSL vs. Australia and New |
| Regis Healthcare vs. REGAL ASIAN INVESTMENTS | Regis Healthcare vs. EMvision Medical Devices | Regis Healthcare vs. Flagship Investments | Regis Healthcare vs. Regal Investment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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