Correlation Between REGAL ASIAN and Westpac Banking
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Westpac Banking 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 Westpac Banking 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 Westpac Banking, you can compare the effects of market volatilities on REGAL ASIAN and Westpac Banking 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 Westpac Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Westpac Banking.
Diversification Opportunities for REGAL ASIAN and Westpac Banking
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between REGAL and Westpac is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Westpac Banking in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westpac Banking 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 Westpac Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westpac Banking has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Westpac Banking go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Westpac Banking
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 4.02 times more return on investment than Westpac Banking. However, REGAL ASIAN is 4.02 times more volatile than Westpac Banking. It trades about 0.03 of its potential returns per unit of risk. Westpac Banking is currently generating about 0.08 per unit of risk. If you would invest 194.00 in REGAL ASIAN INVESTMENTS on August 28, 2024 and sell it today you would earn a total of 18.00 from holding REGAL ASIAN INVESTMENTS or generate 9.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Westpac Banking
Performance |
| Timeline |
| REGAL ASIAN INVESTMENTS |
| Westpac Banking |
REGAL ASIAN and Westpac Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL ASIAN and Westpac Banking
The main advantage of trading using opposite REGAL ASIAN and Westpac Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Westpac Banking 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 Westpac Banking will offset losses from the drop in Westpac Banking'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 |
| Westpac Banking vs. ABACUS STORAGE KING | Westpac Banking vs. Odyssey Energy | Westpac Banking vs. Hotel Property Investments | Westpac Banking vs. Origin Energy |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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