Correlation Between Regal Investment and Truscott Mining
Can any of the company-specific risk be diversified away by investing in both Regal Investment and Truscott Mining 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 Truscott Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Investment and Truscott Mining Corp, you can compare the effects of market volatilities on Regal Investment and Truscott Mining 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 Truscott Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and Truscott Mining.
Diversification Opportunities for Regal Investment and Truscott Mining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regal and Truscott is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and Truscott Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Truscott Mining Corp 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 Truscott Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Truscott Mining Corp has no effect on the direction of Regal Investment i.e., Regal Investment and Truscott Mining go up and down completely randomly.
Pair Corralation between Regal Investment and Truscott Mining
Assuming the 90 days trading horizon Regal Investment is expected to generate 3.57 times less return on investment than Truscott Mining. But when comparing it to its historical volatility, Regal Investment is 3.17 times less risky than Truscott Mining. It trades about 0.05 of its potential returns per unit of risk. Truscott Mining Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4.20 in Truscott Mining Corp on September 3, 2024 and sell it today you would earn a total of 3.30 from holding Truscott Mining Corp or generate 78.57% 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. Truscott Mining Corp
Performance |
| Timeline |
| Regal Investment |
| Truscott Mining Corp |
Regal Investment and Truscott Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Investment and Truscott Mining
The main advantage of trading using opposite Regal Investment and Truscott Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Investment position performs unexpectedly, Truscott Mining 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 Truscott Mining will offset losses from the drop in Truscott Mining'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 |
| Truscott Mining vs. Northern Star Resources | Truscott Mining vs. Evolution Mining | Truscott Mining vs. Bluescope Steel | Truscott Mining vs. Aneka Tambang Tbk |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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