Correlation Between Regal Investment and Flagship Investments
Can any of the company-specific risk be diversified away by investing in both Regal Investment and Flagship Investments 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 Flagship Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Investment and Flagship Investments, you can compare the effects of market volatilities on Regal Investment and Flagship Investments 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 Flagship Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and Flagship Investments.
Diversification Opportunities for Regal Investment and Flagship Investments
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regal and Flagship is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and Flagship Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flagship Investments 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 Flagship Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flagship Investments has no effect on the direction of Regal Investment i.e., Regal Investment and Flagship Investments go up and down completely randomly.
Pair Corralation between Regal Investment and Flagship Investments
Assuming the 90 days trading horizon Regal Investment is expected to generate 0.88 times more return on investment than Flagship Investments. However, Regal Investment is 1.14 times less risky than Flagship Investments. It trades about 0.14 of its potential returns per unit of risk. Flagship Investments is currently generating about 0.04 per unit of risk. If you would invest 258.00 in Regal Investment on August 25, 2024 and sell it today you would earn a total of 95.00 from holding Regal Investment or generate 36.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Investment vs. Flagship Investments
Performance |
| Timeline |
| Regal Investment |
| Flagship Investments |
Regal Investment and Flagship Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Investment and Flagship Investments
The main advantage of trading using opposite Regal Investment and Flagship Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Investment position performs unexpectedly, Flagship Investments 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 Flagship Investments will offset losses from the drop in Flagship Investments' long position.| Regal Investment vs. Westpac Banking | Regal Investment vs. ABACUS STORAGE KING | Regal Investment vs. Odyssey Energy | Regal Investment vs. Hotel Property Investments |
| Flagship Investments vs. Advanced Braking Technology | Flagship Investments vs. Neurotech International | Flagship Investments vs. Lendlease Group | Flagship Investments vs. Energy Technologies Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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