Correlation Between Microequities Asset and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Microequities Asset 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 Microequities Asset and REGAL ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Microequities Asset Management and REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Microequities Asset 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 Microequities Asset with a short position of REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Microequities Asset and REGAL ASIAN.
Diversification Opportunities for Microequities Asset and REGAL ASIAN
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Microequities and REGAL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Microequities Asset Management 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 Microequities Asset 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 Microequities Asset Management 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 Microequities Asset i.e., Microequities Asset and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Microequities Asset and REGAL ASIAN
Assuming the 90 days trading horizon Microequities Asset Management is expected to generate 0.85 times more return on investment than REGAL ASIAN. However, Microequities Asset Management is 1.17 times less risky than REGAL ASIAN. It trades about -0.06 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about -0.32 per unit of risk. If you would invest 54.00 in Microequities Asset Management on September 12, 2024 and sell it today you would lose (1.00) from holding Microequities Asset Management or give up 1.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Microequities Asset Management vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Microequities Asset |
| REGAL ASIAN INVESTMENTS |
Microequities Asset and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Microequities Asset and REGAL ASIAN
The main advantage of trading using opposite Microequities Asset and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microequities Asset 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.| Microequities Asset vs. Aneka Tambang Tbk | Microequities Asset vs. Commonwealth Bank | Microequities Asset vs. BHP Group Limited | Microequities Asset vs. Rio Tinto |
| REGAL ASIAN vs. EVE Health Group | REGAL ASIAN vs. Apiam Animal Health | REGAL ASIAN vs. WiseTech Global Limited | REGAL ASIAN vs. Regis Healthcare |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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