Correlation Between REGAL ASIAN and EP Financial
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and EP Financial 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 EP Financial 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 EP Financial Group, you can compare the effects of market volatilities on REGAL ASIAN and EP Financial 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 EP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and EP Financial.
Diversification Opportunities for REGAL ASIAN and EP Financial
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and EP1 is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and EP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EP Financial Group 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 EP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EP Financial Group has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and EP Financial go up and down completely randomly.
Pair Corralation between REGAL ASIAN and EP Financial
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 2.86 times less return on investment than EP Financial. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 2.58 times less risky than EP Financial. It trades about 0.04 of its potential returns per unit of risk. EP Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 45.00 in EP Financial Group on August 25, 2024 and sell it today you would earn a total of 7.00 from holding EP Financial Group or generate 15.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. EP Financial Group
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| EP Financial Group |
REGAL ASIAN and EP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and EP Financial
The main advantage of trading using opposite REGAL ASIAN and EP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, EP Financial 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 EP Financial will offset losses from the drop in EP Financial's long position.| REGAL ASIAN vs. Queste Communications | REGAL ASIAN vs. Flagship Investments | REGAL ASIAN vs. Embark Education Group | REGAL ASIAN vs. Talisman Mining |
| EP Financial vs. National Australia Bank | EP Financial vs. National Australia Bank | EP Financial vs. Westpac Banking | EP Financial vs. National Australia Bank |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |