Correlation Between Regal Investment and ANZ Group
Can any of the company-specific risk be diversified away by investing in both Regal Investment and ANZ Group 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 ANZ Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Investment and ANZ Group Holdings, you can compare the effects of market volatilities on Regal Investment and ANZ Group 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 ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and ANZ Group.
Diversification Opportunities for Regal Investment and ANZ Group
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Regal and ANZ is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings 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 ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Regal Investment i.e., Regal Investment and ANZ Group go up and down completely randomly.
Pair Corralation between Regal Investment and ANZ Group
Assuming the 90 days trading horizon Regal Investment is expected to generate 4.32 times more return on investment than ANZ Group. However, Regal Investment is 4.32 times more volatile than ANZ Group Holdings. It trades about 0.07 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.05 per unit of risk. If you would invest 311.00 in Regal Investment on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Regal Investment or generate 9.97% 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. ANZ Group Holdings
Performance |
| Timeline |
| Regal Investment |
| ANZ Group Holdings |
Regal Investment and ANZ Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Investment and ANZ Group
The main advantage of trading using opposite Regal Investment and ANZ Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Investment position performs unexpectedly, ANZ Group 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 ANZ Group will offset losses from the drop in ANZ Group's long position.| Regal Investment vs. Champion Iron | Regal Investment vs. iShares Global Healthcare | Regal Investment vs. Peel Mining | Regal Investment vs. Australian Dairy Farms |
| ANZ Group vs. Stelar Metals | ANZ Group vs. Air New Zealand | ANZ Group vs. Magellan Financial Group | ANZ Group vs. 29Metals |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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