Correlation Between Ironbark Capital and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Ironbark Capital 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 Ironbark Capital and REGAL ASIAN 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 ASIAN INVESTMENTS, you can compare the effects of market volatilities on Ironbark Capital 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 Ironbark Capital with a short position of REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ironbark Capital and REGAL ASIAN.
Diversification Opportunities for Ironbark Capital and REGAL ASIAN
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ironbark and REGAL is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Ironbark Capital 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 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 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 Ironbark Capital i.e., Ironbark Capital and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Ironbark Capital and REGAL ASIAN
Assuming the 90 days trading horizon Ironbark Capital is expected to generate 2.31 times less return on investment than REGAL ASIAN. But when comparing it to its historical volatility, Ironbark Capital is 1.03 times less risky than REGAL ASIAN. It trades about 0.02 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 183.00 in REGAL ASIAN INVESTMENTS on September 1, 2024 and sell it today you would earn a total of 25.00 from holding REGAL ASIAN INVESTMENTS or generate 13.66% 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 ASIAN INVESTMENTS
Performance |
| Timeline |
| Ironbark Capital |
| REGAL ASIAN INVESTMENTS |
Ironbark Capital and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ironbark Capital and REGAL ASIAN
The main advantage of trading using opposite Ironbark Capital and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ironbark Capital 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.| Ironbark Capital vs. Mount Gibson Iron | Ironbark Capital vs. Bisalloy Steel Group | Ironbark Capital vs. Iron Road | Ironbark Capital vs. Vulcan Steel |
| REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Midway | REGAL ASIAN vs. Aristocrat Leisure | REGAL ASIAN 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |