Correlation Between Gold Road and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Gold Road 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 Gold Road and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and Regis Healthcare, you can compare the effects of market volatilities on Gold Road 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 Gold Road with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and Regis Healthcare.
Diversification Opportunities for Gold Road and Regis Healthcare
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gold and Regis is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and Gold Road 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 Gold Road Resources 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 Gold Road i.e., Gold Road and Regis Healthcare go up and down completely randomly.
Pair Corralation between Gold Road and Regis Healthcare
Assuming the 90 days trading horizon Gold Road Resources is expected to under-perform the Regis Healthcare. In addition to that, Gold Road is 1.37 times more volatile than Regis Healthcare. It trades about -0.04 of its total potential returns per unit of risk. Regis Healthcare is currently generating about 0.05 per unit of volatility. If you would invest 646.00 in Regis Healthcare on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Regis Healthcare or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gold Road Resources vs. Regis Healthcare
Performance |
| Timeline |
| Gold Road Resources |
| Regis Healthcare |
Gold Road and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gold Road and Regis Healthcare
The main advantage of trading using opposite Gold Road and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road 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.| Gold Road vs. Northern Star Resources | Gold Road vs. Evolution Mining | Gold Road vs. Bluescope Steel | Gold Road vs. Sandfire Resources NL |
| 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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