Correlation Between Insignia Financial and Regal Investment
Can any of the company-specific risk be diversified away by investing in both Insignia Financial 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 Insignia Financial and Regal Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Insignia Financial and Regal Investment, you can compare the effects of market volatilities on Insignia Financial 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 Insignia Financial with a short position of Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Insignia Financial and Regal Investment.
Diversification Opportunities for Insignia Financial and Regal Investment
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Insignia and Regal is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Insignia Financial and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment and Insignia Financial 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 Insignia Financial 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 Insignia Financial i.e., Insignia Financial and Regal Investment go up and down completely randomly.
Pair Corralation between Insignia Financial and Regal Investment
Assuming the 90 days trading horizon Insignia Financial is expected to generate 1.33 times less return on investment than Regal Investment. In addition to that, Insignia Financial is 1.71 times more volatile than Regal Investment. It trades about 0.02 of its total potential returns per unit of risk. Regal Investment is currently generating about 0.05 per unit of volatility. If you would invest 260.00 in Regal Investment on September 14, 2024 and sell it today you would earn a total of 81.00 from holding Regal Investment or generate 31.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Insignia Financial vs. Regal Investment
Performance |
| Timeline |
| Insignia Financial |
| Regal Investment |
Insignia Financial and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Insignia Financial and Regal Investment
The main advantage of trading using opposite Insignia Financial and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Insignia Financial 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.| Insignia Financial vs. Audio Pixels Holdings | Insignia Financial vs. Iodm | Insignia Financial vs. Nsx | Insignia Financial vs. TTG Fintech |
| Regal Investment vs. Credit Clear | Regal Investment vs. Insignia Financial | Regal Investment vs. Auswide Bank | Regal Investment vs. Actinogen Medical |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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