Correlation Between REGAL ASIAN and Group 6
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Group 6 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 Group 6 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 Group 6 Metals, you can compare the effects of market volatilities on REGAL ASIAN and Group 6 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 Group 6. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Group 6.
Diversification Opportunities for REGAL ASIAN and Group 6
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between REGAL and Group is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Group 6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group 6 Metals 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 Group 6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group 6 Metals has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Group 6 go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Group 6
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.22 times more return on investment than Group 6. However, REGAL ASIAN INVESTMENTS is 4.61 times less risky than Group 6. It trades about 0.03 of its potential returns per unit of risk. Group 6 Metals is currently generating about 0.0 per unit of risk. If you would invest 207.00 in REGAL ASIAN INVESTMENTS on August 29, 2024 and sell it today you would earn a total of 8.00 from holding REGAL ASIAN INVESTMENTS or generate 3.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Group 6 Metals
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Group 6 Metals |
REGAL ASIAN and Group 6 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Group 6
The main advantage of trading using opposite REGAL ASIAN and Group 6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Group 6 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 Group 6 will offset losses from the drop in Group 6's long position.| REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Odyssey Energy | REGAL ASIAN vs. Hotel Property Investments | REGAL ASIAN vs. Origin Energy |
| Group 6 vs. Northern Star Resources | Group 6 vs. Evolution Mining | Group 6 vs. Bluescope Steel | Group 6 vs. Sandfire Resources NL |
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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