Correlation Between REGAL ASIAN and Dow Jones
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on REGAL ASIAN and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Dow Jones.
Diversification Opportunities for REGAL ASIAN and Dow Jones
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and Dow is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Dow Jones go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Dow Jones
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 1.75 times less return on investment than Dow Jones. In addition to that, REGAL ASIAN is 1.78 times more volatile than Dow Jones Industrial. It trades about 0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.14 per unit of volatility. If you would invest 3,885,286 in Dow Jones Industrial on August 25, 2024 and sell it today you would earn a total of 544,365 from holding Dow Jones Industrial or generate 14.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.67% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Dow Jones Industrial
Performance |
| Timeline |
REGAL ASIAN and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
REGAL ASIAN INVESTMENTS
Pair trading matchups for REGAL ASIAN
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with REGAL ASIAN and Dow Jones
The main advantage of trading using opposite REGAL ASIAN and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| REGAL ASIAN vs. Westpac Banking | REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Odyssey Energy | REGAL ASIAN vs. Ecofibre |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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