Correlation Between REGAL ASIAN and Steamships Trading
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Steamships Trading 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 Steamships Trading 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 Steamships Trading, you can compare the effects of market volatilities on REGAL ASIAN and Steamships Trading 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 Steamships Trading. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Steamships Trading.
Diversification Opportunities for REGAL ASIAN and Steamships Trading
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and Steamships is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Steamships Trading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steamships Trading 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 Steamships Trading. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steamships Trading has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Steamships Trading go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Steamships Trading
Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 2.28 times less return on investment than Steamships Trading. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 1.11 times less risky than Steamships Trading. It trades about 0.03 of its potential returns per unit of risk. Steamships Trading is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 988.00 in Steamships Trading on August 29, 2024 and sell it today you would earn a total of 392.00 from holding Steamships Trading or generate 39.68% 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. Steamships Trading
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Steamships Trading |
REGAL ASIAN and Steamships Trading Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Steamships Trading
The main advantage of trading using opposite REGAL ASIAN and Steamships Trading positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Steamships Trading 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 Steamships Trading will offset losses from the drop in Steamships Trading's long position.| REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Odyssey Energy | REGAL ASIAN vs. Champion Iron | REGAL ASIAN vs. Ridley |
| Steamships Trading vs. Aneka Tambang Tbk | Steamships Trading vs. ANZ Group Holdings | Steamships Trading vs. Australia and New | Steamships Trading vs. Commonwealth 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.
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