Correlation Between Regis Healthcare and Macquarie
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Macquarie 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 Macquarie into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and Macquarie Group, you can compare the effects of market volatilities on Regis Healthcare and Macquarie 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 Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Macquarie.
Diversification Opportunities for Regis Healthcare and Macquarie
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regis and Macquarie is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie Group 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 Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Macquarie go up and down completely randomly.
Pair Corralation between Regis Healthcare and Macquarie
Assuming the 90 days trading horizon Regis Healthcare is expected to generate 1.85 times more return on investment than Macquarie. However, Regis Healthcare is 1.85 times more volatile than Macquarie Group. It trades about 0.13 of its potential returns per unit of risk. Macquarie Group is currently generating about 0.07 per unit of risk. If you would invest 182.00 in Regis Healthcare on September 12, 2024 and sell it today you would earn a total of 461.00 from holding Regis Healthcare or generate 253.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regis Healthcare vs. Macquarie Group
Performance |
| Timeline |
| Regis Healthcare |
| Macquarie Group |
Regis Healthcare and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Healthcare and Macquarie
The main advantage of trading using opposite Regis Healthcare and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Macquarie 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 Macquarie will offset losses from the drop in Macquarie's long position.| Regis Healthcare vs. Retail Food Group | Regis Healthcare vs. Stelar Metals | Regis Healthcare vs. Computershare | Regis Healthcare vs. Duxton Broadacre Farms |
| Macquarie vs. Austco Healthcare | Macquarie vs. Bell Financial Group | Macquarie vs. Oneview Healthcare PLC | Macquarie vs. Bank of Queensland |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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