Correlation Between Regis Healthcare and LGI
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and LGI 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 LGI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and LGI, you can compare the effects of market volatilities on Regis Healthcare and LGI 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 LGI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and LGI.
Diversification Opportunities for Regis Healthcare and LGI
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regis and LGI is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and LGI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGI 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 LGI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGI has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and LGI go up and down completely randomly.
Pair Corralation between Regis Healthcare and LGI
Assuming the 90 days trading horizon Regis Healthcare is expected to generate 0.98 times more return on investment than LGI. However, Regis Healthcare is 1.02 times less risky than LGI. It trades about 0.14 of its potential returns per unit of risk. LGI is currently generating about 0.08 per unit of risk. If you would invest 322.00 in Regis Healthcare on November 1, 2024 and sell it today you would earn a total of 316.00 from holding Regis Healthcare or generate 98.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Regis Healthcare vs. LGI
Performance |
| Timeline |
| Regis Healthcare |
| LGI |
Regis Healthcare and LGI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Healthcare and LGI
The main advantage of trading using opposite Regis Healthcare and LGI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, LGI 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 LGI will offset losses from the drop in LGI's long position.| Regis Healthcare vs. Apiam Animal Health | Regis Healthcare vs. Viva Leisure | Regis Healthcare vs. Oceania Healthcare | Regis Healthcare vs. oOhMedia |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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