Correlation Between Regal Investment and AMP
Can any of the company-specific risk be diversified away by investing in both Regal Investment and AMP 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 AMP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Investment and AMP, you can compare the effects of market volatilities on Regal Investment and AMP 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 AMP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and AMP.
Diversification Opportunities for Regal Investment and AMP
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regal and AMP is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and AMP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMP 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 AMP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMP has no effect on the direction of Regal Investment i.e., Regal Investment and AMP go up and down completely randomly.
Pair Corralation between Regal Investment and AMP
Assuming the 90 days trading horizon Regal Investment is expected to generate 38.5 times less return on investment than AMP. In addition to that, Regal Investment is 1.04 times more volatile than AMP. It trades about 0.01 of its total potential returns per unit of risk. AMP is currently generating about 0.27 per unit of volatility. If you would invest 142.00 in AMP on August 29, 2024 and sell it today you would earn a total of 12.00 from holding AMP or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Investment vs. AMP
Performance |
| Timeline |
| Regal Investment |
| AMP |
Regal Investment and AMP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Investment and AMP
The main advantage of trading using opposite Regal Investment and AMP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Investment position performs unexpectedly, AMP 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 AMP will offset losses from the drop in AMP's long position.| Regal Investment vs. Embark Education Group | Regal Investment vs. Pinnacle Investment Management | Regal Investment vs. Stelar Metals | Regal Investment vs. Nova Eye Medical |
| AMP vs. Seven West Media | AMP vs. ARN Media Limited | AMP vs. K2 Asset Management | AMP vs. Austco Healthcare |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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