Correlation Between Regis Healthcare and Scentre
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Scentre 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 Scentre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and Scentre Group, you can compare the effects of market volatilities on Regis Healthcare and Scentre 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 Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Scentre.
Diversification Opportunities for Regis Healthcare and Scentre
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regis and Scentre is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre 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 Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Scentre go up and down completely randomly.
Pair Corralation between Regis Healthcare and Scentre
Assuming the 90 days trading horizon Regis Healthcare is expected to under-perform the Scentre. In addition to that, Regis Healthcare is 2.35 times more volatile than Scentre Group. It trades about -0.05 of its total potential returns per unit of risk. Scentre Group is currently generating about 0.09 per unit of volatility. If you would invest 348.00 in Scentre Group on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Scentre Group or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regis Healthcare vs. Scentre Group
Performance |
| Timeline |
| Regis Healthcare |
| Scentre Group |
Regis Healthcare and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Healthcare and Scentre
The main advantage of trading using opposite Regis Healthcare and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Scentre 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 Scentre will offset losses from the drop in Scentre's long position.| Regis Healthcare vs. Energy Resources | Regis Healthcare vs. 88 Energy | Regis Healthcare vs. Amani Gold | Regis Healthcare vs. A1 Investments Resources |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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