Correlation Between Regulus Resources and Inari Medical
Can any of the company-specific risk be diversified away by investing in both Regulus Resources and Inari Medical 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 Regulus Resources and Inari Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regulus Resources and Inari Medical, you can compare the effects of market volatilities on Regulus Resources and Inari Medical 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 Regulus Resources with a short position of Inari Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regulus Resources and Inari Medical.
Diversification Opportunities for Regulus Resources and Inari Medical
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Regulus and Inari is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Regulus Resources and Inari Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inari Medical and Regulus Resources 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 Regulus Resources are associated (or correlated) with Inari Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inari Medical has no effect on the direction of Regulus Resources i.e., Regulus Resources and Inari Medical go up and down completely randomly.
Pair Corralation between Regulus Resources and Inari Medical
Assuming the 90 days horizon Regulus Resources is expected to generate 2.32 times less return on investment than Inari Medical. But when comparing it to its historical volatility, Regulus Resources is 3.18 times less risky than Inari Medical. It trades about 0.4 of its potential returns per unit of risk. Inari Medical is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 5,324 in Inari Medical on October 24, 2024 and sell it today you would earn a total of 2,631 from holding Inari Medical or generate 49.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regulus Resources vs. Inari Medical
Performance |
| Timeline |
| Regulus Resources |
| Inari Medical |
Regulus Resources and Inari Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regulus Resources and Inari Medical
The main advantage of trading using opposite Regulus Resources and Inari Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regulus Resources position performs unexpectedly, Inari Medical 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 Inari Medical will offset losses from the drop in Inari Medical's long position.| Regulus Resources vs. Peak Resources Limited | Regulus Resources vs. Glen Eagle Resources | Regulus Resources vs. Metals Creek Resources | Regulus Resources vs. PepinNini Minerals Limited |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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