Correlation Between REGAL ASIAN and Austal
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Austal 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 ASIAN and Austal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and Austal, you can compare the effects of market volatilities on REGAL ASIAN and Austal 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 ASIAN with a short position of Austal. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Austal.
Diversification Opportunities for REGAL ASIAN and Austal
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and Austal is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Austal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austal and REGAL ASIAN 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 ASIAN INVESTMENTS are associated (or correlated) with Austal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austal has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Austal go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Austal
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.89 times more return on investment than Austal. However, REGAL ASIAN INVESTMENTS is 1.12 times less risky than Austal. It trades about -0.26 of its potential returns per unit of risk. Austal is currently generating about -0.4 per unit of risk. If you would invest 226.00 in REGAL ASIAN INVESTMENTS on September 15, 2024 and sell it today you would lose (19.00) from holding REGAL ASIAN INVESTMENTS or give up 8.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Austal
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Austal |
REGAL ASIAN and Austal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Austal
The main advantage of trading using opposite REGAL ASIAN and Austal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Austal 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 Austal will offset losses from the drop in Austal's long position.| REGAL ASIAN vs. Westpac Banking | REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Odyssey Energy | REGAL ASIAN vs. Sims |
| Austal vs. Auctus Alternative Investments | Austal vs. Hudson Investment Group | Austal vs. Retail Food Group | Austal vs. REGAL ASIAN INVESTMENTS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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