Correlation Between Ecofibre and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Ecofibre and REGAL ASIAN 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 Ecofibre and REGAL ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecofibre and REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Ecofibre and REGAL ASIAN 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 Ecofibre with a short position of REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecofibre and REGAL ASIAN.
Diversification Opportunities for Ecofibre and REGAL ASIAN
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ecofibre and REGAL is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Ecofibre and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS and Ecofibre 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 Ecofibre are associated (or correlated) with REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Ecofibre i.e., Ecofibre and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Ecofibre and REGAL ASIAN
Assuming the 90 days trading horizon Ecofibre is expected to under-perform the REGAL ASIAN. In addition to that, Ecofibre is 2.36 times more volatile than REGAL ASIAN INVESTMENTS. It trades about -0.22 of its total potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about -0.02 per unit of volatility. If you would invest 220.00 in REGAL ASIAN INVESTMENTS on August 25, 2024 and sell it today you would lose (2.00) from holding REGAL ASIAN INVESTMENTS or give up 0.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecofibre vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Ecofibre |
| REGAL ASIAN INVESTMENTS |
Ecofibre and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecofibre and REGAL ASIAN
The main advantage of trading using opposite Ecofibre and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecofibre position performs unexpectedly, REGAL ASIAN 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 ASIAN will offset losses from the drop in REGAL ASIAN's long position.| Ecofibre vs. Commonwealth Bank of | Ecofibre vs. Wt Financial Group | Ecofibre vs. Actinogen Medical | Ecofibre vs. EMvision Medical Devices |
| REGAL ASIAN vs. Westpac Banking | REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Odyssey Energy | REGAL ASIAN vs. Ecofibre |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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