Correlation Between Ironbark Capital and Regal Investment
Can any of the company-specific risk be diversified away by investing in both Ironbark Capital 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 Ironbark Capital and Regal Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ironbark Capital and Regal Investment, you can compare the effects of market volatilities on Ironbark Capital 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 Ironbark Capital with a short position of Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and Regal Investment.
Diversification Opportunities for Ironbark Capital and Regal Investment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ironbark and Regal is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment and Ironbark Capital 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 Ironbark Capital 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 Ironbark Capital i.e., Ironbark Capital and Regal Investment go up and down completely randomly.
Pair Corralation between Ironbark Capital and Regal Investment
Assuming the 90 days trading horizon Ironbark Capital is expected to generate 3.47 times less return on investment than Regal Investment. But when comparing it to its historical volatility, Ironbark Capital is 1.01 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 0.1 of returns per unit of risk over similar time horizon. If you would invest 259.00 in Regal Investment on September 2, 2024 and sell it today you would earn a total of 83.00 from holding Regal Investment or generate 32.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ironbark Capital vs. Regal Investment
Performance |
| Timeline |
| Ironbark Capital |
| Regal Investment |
Ironbark Capital and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ironbark Capital and Regal Investment
The main advantage of trading using opposite Ironbark Capital and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironbark Capital 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.| Ironbark Capital vs. Garda Diversified Ppty | Ironbark Capital vs. Sandon Capital Investments | Ironbark Capital vs. Duxton Broadacre Farms | Ironbark Capital vs. Hotel Property Investments |
| Regal Investment vs. ABACUS STORAGE KING | Regal Investment vs. Midway | Regal Investment vs. Aristocrat Leisure | Regal Investment vs. Imricor Medical Systems |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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