Correlation Between PICKN PAY and Regal Hotels
Can any of the company-specific risk be diversified away by investing in both PICKN PAY and Regal Hotels 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 PICKN PAY and Regal Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PICKN PAY STORES and Regal Hotels International, you can compare the effects of market volatilities on PICKN PAY and Regal Hotels 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 PICKN PAY with a short position of Regal Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of PICKN PAY and Regal Hotels.
Diversification Opportunities for PICKN PAY and Regal Hotels
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between PICKN and Regal is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding PICKN PAY STORES and Regal Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Hotels Interna and PICKN PAY 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 PICKN PAY STORES are associated (or correlated) with Regal Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Hotels Interna has no effect on the direction of PICKN PAY i.e., PICKN PAY and Regal Hotels go up and down completely randomly.
Pair Corralation between PICKN PAY and Regal Hotels
Assuming the 90 days trading horizon PICKN PAY STORES is expected to generate 1.48 times more return on investment than Regal Hotels. However, PICKN PAY is 1.48 times more volatile than Regal Hotels International. It trades about 0.05 of its potential returns per unit of risk. Regal Hotels International is currently generating about -0.01 per unit of risk. If you would invest 116.00 in PICKN PAY STORES on August 25, 2024 and sell it today you would earn a total of 35.00 from holding PICKN PAY STORES or generate 30.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PICKN PAY STORES vs. Regal Hotels International
Performance |
| Timeline |
| PICKN PAY STORES |
| Regal Hotels Interna |
PICKN PAY and Regal Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PICKN PAY and Regal Hotels
The main advantage of trading using opposite PICKN PAY and Regal Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PICKN PAY position performs unexpectedly, Regal Hotels 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 Hotels will offset losses from the drop in Regal Hotels' long position.The idea behind PICKN PAY STORES and Regal Hotels International pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Regal Hotels vs. BJs Wholesale Club | Regal Hotels vs. AOI Electronics Co | Regal Hotels vs. Richardson Electronics | Regal Hotels vs. PICKN PAY STORES |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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