Correlation Between Regis Healthcare and Air New
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Air New 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 Regis Healthcare and Air New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and Air New Zealand, you can compare the effects of market volatilities on Regis Healthcare and Air New 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 Regis Healthcare with a short position of Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Air New.
Diversification Opportunities for Regis Healthcare and Air New
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regis and Air is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand and Regis Healthcare 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 Regis Healthcare are associated (or correlated) with Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Air New go up and down completely randomly.
Pair Corralation between Regis Healthcare and Air New
Assuming the 90 days trading horizon Regis Healthcare is expected to generate 1.5 times more return on investment than Air New. However, Regis Healthcare is 1.5 times more volatile than Air New Zealand. It trades about 0.14 of its potential returns per unit of risk. Air New Zealand is currently generating about 0.01 per unit of risk. If you would invest 638.00 in Regis Healthcare on August 26, 2024 and sell it today you would earn a total of 32.00 from holding Regis Healthcare or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regis Healthcare vs. Air New Zealand
Performance |
| Timeline |
| Regis Healthcare |
| Air New Zealand |
Regis Healthcare and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Healthcare and Air New
The main advantage of trading using opposite Regis Healthcare and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Regis Healthcare vs. Inventis | Regis Healthcare vs. PM Capital Global | Regis Healthcare vs. Macquarie Group Ltd | Regis Healthcare vs. Wam Leaders |
| Air New vs. Bio Gene Technology | Air New vs. Computershare | Air New vs. Hutchison Telecommunications | Air New vs. BTC Health Limited |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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