Correlation Between Regis Healthcare and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Westpac Banking 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 Westpac Banking into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and Westpac Banking, you can compare the effects of market volatilities on Regis Healthcare and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Westpac Banking.
Diversification Opportunities for Regis Healthcare and Westpac Banking
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regis and Westpac is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Westpac Banking go up and down completely randomly.
Pair Corralation between Regis Healthcare and Westpac Banking
Assuming the 90 days trading horizon Regis Healthcare is expected to generate 6.74 times more return on investment than Westpac Banking. However, Regis Healthcare is 6.74 times more volatile than Westpac Banking. It trades about 0.13 of its potential returns per unit of risk. Westpac Banking is currently generating about 0.11 per unit of risk. If you would invest 165.00 in Regis Healthcare on October 12, 2024 and sell it today you would earn a total of 456.00 from holding Regis Healthcare or generate 276.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 52.91% |
| Values | Daily Returns |
Regis Healthcare vs. Westpac Banking
Performance |
| Timeline |
| Regis Healthcare |
| Westpac Banking |
Regis Healthcare and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Healthcare and Westpac Banking
The main advantage of trading using opposite Regis Healthcare and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking's long position.| Regis Healthcare vs. Sayona Mining | Regis Healthcare vs. Talisman Mining | Regis Healthcare vs. Perseus Mining | Regis Healthcare vs. Hutchison Telecommunications |
| Westpac Banking vs. Diversified United Investment | Westpac Banking vs. Auctus Alternative Investments | Westpac Banking vs. Firstwave Cloud Technology | Westpac Banking vs. Hotel Property Investments |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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