Correlation Between Regal Investment and ARN Media
Can any of the company-specific risk be diversified away by investing in both Regal Investment and ARN Media 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 Regal Investment and ARN Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Investment and ARN Media Limited, you can compare the effects of market volatilities on Regal Investment and ARN Media 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 Regal Investment with a short position of ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and ARN Media.
Diversification Opportunities for Regal Investment and ARN Media
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Regal and ARN is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited and Regal Investment 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 Regal Investment are associated (or correlated) with ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Regal Investment i.e., Regal Investment and ARN Media go up and down completely randomly.
Pair Corralation between Regal Investment and ARN Media
Assuming the 90 days trading horizon Regal Investment is expected to generate 0.47 times more return on investment than ARN Media. However, Regal Investment is 2.14 times less risky than ARN Media. It trades about 0.02 of its potential returns per unit of risk. ARN Media Limited is currently generating about -0.14 per unit of risk. If you would invest 333.00 in Regal Investment on November 27, 2024 and sell it today you would earn a total of 1.00 from holding Regal Investment or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Investment vs. ARN Media Limited
Performance |
| Timeline |
| Regal Investment |
| ARN Media Limited |
Regal Investment and ARN Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Investment and ARN Media
The main advantage of trading using opposite Regal Investment and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Investment position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.| Regal Investment vs. Step One Clothing | Regal Investment vs. Champion Iron | Regal Investment vs. Aeris Environmental | Regal Investment vs. Cleanspace Holdings |
| ARN Media vs. Olympio Metals | ARN Media vs. Lykos Metals | ARN Media vs. Bisalloy Steel Group | ARN Media vs. ACDC Metals |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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