Correlation Between Regis Healthcare and Super Retail
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Super Retail 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 Super Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and Super Retail Group, you can compare the effects of market volatilities on Regis Healthcare and Super Retail 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 Super Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Super Retail.
Diversification Opportunities for Regis Healthcare and Super Retail
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regis and Super is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Super Retail Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super Retail 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 Super Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super Retail Group has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Super Retail go up and down completely randomly.
Pair Corralation between Regis Healthcare and Super Retail
Assuming the 90 days trading horizon Regis Healthcare is expected to generate 1.5 times more return on investment than Super Retail. However, Regis Healthcare is 1.5 times more volatile than Super Retail Group. It trades about 0.07 of its potential returns per unit of risk. Super Retail Group is currently generating about 0.05 per unit of risk. If you would invest 629.00 in Regis Healthcare on November 7, 2024 and sell it today you would earn a total of 16.00 from holding Regis Healthcare or generate 2.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regis Healthcare vs. Super Retail Group
Performance |
| Timeline |
| Regis Healthcare |
| Super Retail Group |
Regis Healthcare and Super Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Healthcare and Super Retail
The main advantage of trading using opposite Regis Healthcare and Super Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Super Retail 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 Super Retail will offset losses from the drop in Super Retail's long position.| Regis Healthcare vs. Sports Entertainment Group | Regis Healthcare vs. Treasury Wine Estates | Regis Healthcare vs. Retail Food Group | Regis Healthcare vs. Kip McGrath Education |
| Super Retail vs. Kneomedia | Super Retail vs. Southern Cross Media | Super Retail vs. Austco Healthcare | Super Retail vs. EVE Health Group |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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