Correlation Between Regal Investment and Hotel Property
Can any of the company-specific risk be diversified away by investing in both Regal Investment and Hotel Property 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 Hotel Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Investment and Hotel Property Investments, you can compare the effects of market volatilities on Regal Investment and Hotel Property 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 Hotel Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and Hotel Property.
Diversification Opportunities for Regal Investment and Hotel Property
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regal and Hotel is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and Hotel Property Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hotel Property Inves 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 Hotel Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hotel Property Inves has no effect on the direction of Regal Investment i.e., Regal Investment and Hotel Property go up and down completely randomly.
Pair Corralation between Regal Investment and Hotel Property
Assuming the 90 days trading horizon Regal Investment is expected to generate 1.36 times less return on investment than Hotel Property. But when comparing it to its historical volatility, Regal Investment is 1.09 times less risky than Hotel Property. It trades about 0.07 of its potential returns per unit of risk. Hotel Property Investments is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 316.00 in Hotel Property Investments on September 3, 2024 and sell it today you would earn a total of 54.00 from holding Hotel Property Investments or generate 17.09% 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. Hotel Property Investments
Performance |
| Timeline |
| Regal Investment |
| Hotel Property Inves |
Regal Investment and Hotel Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Investment and Hotel Property
The main advantage of trading using opposite Regal Investment and Hotel Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Investment position performs unexpectedly, Hotel Property 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 Hotel Property will offset losses from the drop in Hotel Property's long position.| Regal Investment vs. ABACUS STORAGE KING | Regal Investment vs. Champion Iron | Regal Investment vs. iShares Global Healthcare | Regal Investment vs. Peel Mining |
| Hotel Property vs. Charter Hall Retail | Hotel Property vs. GDI Property Group | Hotel Property vs. Champion Iron | Hotel Property vs. iShares Global 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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