Correlation Between Regis Healthcare and BKI Investment
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and BKI 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 Regis Healthcare and BKI Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and BKI Investment, you can compare the effects of market volatilities on Regis Healthcare and BKI 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 Regis Healthcare with a short position of BKI Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and BKI Investment.
Diversification Opportunities for Regis Healthcare and BKI Investment
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Regis and BKI is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and BKI Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BKI Investment 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 BKI Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BKI Investment has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and BKI Investment go up and down completely randomly.
Pair Corralation between Regis Healthcare and BKI Investment
Assuming the 90 days trading horizon Regis Healthcare is expected to generate 2.71 times more return on investment than BKI Investment. However, Regis Healthcare is 2.71 times more volatile than BKI Investment. It trades about 0.12 of its potential returns per unit of risk. BKI Investment is currently generating about 0.01 per unit of risk. If you would invest 187.00 in Regis Healthcare on August 29, 2024 and sell it today you would earn a total of 463.00 from holding Regis Healthcare or generate 247.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regis Healthcare vs. BKI Investment
Performance |
| Timeline |
| Regis Healthcare |
| BKI Investment |
Regis Healthcare and BKI Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Healthcare and BKI Investment
The main advantage of trading using opposite Regis Healthcare and BKI Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, BKI 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 BKI Investment will offset losses from the drop in BKI Investment's long position.| Regis Healthcare vs. Westpac Banking | Regis Healthcare vs. Champion Iron | Regis Healthcare vs. Ridley | Regis Healthcare vs. Peel Mining |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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