Correlation Between Regis Healthcare and Australian Strategic

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Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Australian Strategic 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 Australian Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and Australian Strategic Materials, you can compare the effects of market volatilities on Regis Healthcare and Australian Strategic 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 Australian Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Australian Strategic.

Diversification Opportunities for Regis Healthcare and Australian Strategic

RegisAustralianDiversified AwayRegisAustralianDiversified Away100%
-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Regis and Australian is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Australian Strategic Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Strategic 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 Australian Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Strategic has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Australian Strategic go up and down completely randomly.

Pair Corralation between Regis Healthcare and Australian Strategic

Assuming the 90 days trading horizon Regis Healthcare is expected to generate 0.68 times more return on investment than Australian Strategic. However, Regis Healthcare is 1.48 times less risky than Australian Strategic. It trades about 0.06 of its potential returns per unit of risk. Australian Strategic Materials is currently generating about -0.2 per unit of risk. If you would invest  632.00  in Regis Healthcare on November 23, 2024 and sell it today you would earn a total of  10.00  from holding Regis Healthcare or generate 1.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Regis Healthcare  vs.  Australian Strategic Materials

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15REG ASM
       Timeline  
Regis Healthcare 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Regis Healthcare has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Regis Healthcare is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb66.26.46.66.87
Australian Strategic 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Australian Strategic Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Australian Strategic is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.460.480.50.520.540.560.58

Regis Healthcare and Australian Strategic Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.56-4.92-3.27-1.620.01.653.335.016.69 0.020.040.060.08
JavaScript chart by amCharts 3.21.15REG ASM
       Returns  

Pair Trading with Regis Healthcare and Australian Strategic

The main advantage of trading using opposite Regis Healthcare and Australian Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Australian Strategic 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 Australian Strategic will offset losses from the drop in Australian Strategic's long position.
The idea behind Regis Healthcare and Australian Strategic Materials 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.
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.

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