Correlation Between REGAL ASIAN and Carlton Investments
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Carlton 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 ASIAN and Carlton Investments 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 Carlton Investments, you can compare the effects of market volatilities on REGAL ASIAN and Carlton 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 ASIAN with a short position of Carlton Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Carlton Investments.
Diversification Opportunities for REGAL ASIAN and Carlton Investments
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between REGAL and Carlton is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Carlton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlton Investments 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 Carlton Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlton Investments has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Carlton Investments go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Carlton Investments
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Carlton Investments. In addition to that, REGAL ASIAN is 1.55 times more volatile than Carlton Investments. It trades about -0.02 of its total potential returns per unit of risk. Carlton Investments is currently generating about 0.11 per unit of volatility. If you would invest 2,997 in Carlton Investments on August 25, 2024 and sell it today you would earn a total of 68.00 from holding Carlton Investments or generate 2.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Carlton Investments
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Carlton Investments |
REGAL ASIAN and Carlton Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Carlton Investments
The main advantage of trading using opposite REGAL ASIAN and Carlton Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Carlton 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 Carlton Investments will offset losses from the drop in Carlton Investments' long position.| REGAL ASIAN vs. Queste Communications | REGAL ASIAN vs. Flagship Investments | REGAL ASIAN vs. Embark Education Group | REGAL ASIAN vs. Talisman Mining |
| Carlton Investments vs. Infomedia | Carlton Investments vs. Janison Education Group | Carlton Investments vs. G8 Education | Carlton Investments vs. Autosports Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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