Correlation Between Regis Common and American International
Can any of the company-specific risk be diversified away by investing in both Regis Common and American International 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 Regis Common and American International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Common and American International Holdings, you can compare the effects of market volatilities on Regis Common and American International 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 Regis Common with a short position of American International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Common and American International.
Diversification Opportunities for Regis Common and American International
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Regis and American is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Regis Common and American International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American International and Regis Common 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 Regis Common are associated (or correlated) with American International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American International has no effect on the direction of Regis Common i.e., Regis Common and American International go up and down completely randomly.
Pair Corralation between Regis Common and American International
Considering the 90-day investment horizon Regis Common is expected to generate 24.25 times less return on investment than American International. But when comparing it to its historical volatility, Regis Common is 8.44 times less risky than American International. It trades about 0.06 of its potential returns per unit of risk. American International Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 0.13 in American International Holdings on August 25, 2024 and sell it today you would lose (0.12) from holding American International Holdings or give up 92.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 80.07% |
| Values | Daily Returns |
Regis Common vs. American International Holding
Performance |
| Timeline |
| Regis Common |
| American International |
Regis Common and American International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Common and American International
The main advantage of trading using opposite Regis Common and American International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Common position performs unexpectedly, American International 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 American International will offset losses from the drop in American International's long position.| Regis Common vs. Goodfood Market Corp | Regis Common vs. Frontdoor | Regis Common vs. XWELL Inc | Regis Common vs. Interactive Strength Common |
| American International vs. Goodfood Market Corp | American International vs. GD Entertainment Technology | American International vs. Mister Car Wash | American International vs. Bright Horizons Family |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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