Correlation Between Regal Hotels and Universal Display
Can any of the company-specific risk be diversified away by investing in both Regal Hotels and Universal Display 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 Hotels and Universal Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Hotels International and Universal Display, you can compare the effects of market volatilities on Regal Hotels and Universal Display 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 Hotels with a short position of Universal Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Hotels and Universal Display.
Diversification Opportunities for Regal Hotels and Universal Display
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Regal and Universal is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Regal Hotels International and Universal Display in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Display and Regal Hotels 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 Hotels International are associated (or correlated) with Universal Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Display has no effect on the direction of Regal Hotels i.e., Regal Hotels and Universal Display go up and down completely randomly.
Pair Corralation between Regal Hotels and Universal Display
Assuming the 90 days trading horizon Regal Hotels International is expected to generate 1.72 times more return on investment than Universal Display. However, Regal Hotels is 1.72 times more volatile than Universal Display. It trades about 0.25 of its potential returns per unit of risk. Universal Display is currently generating about -0.24 per unit of risk. If you would invest 26.00 in Regal Hotels International on October 17, 2024 and sell it today you would earn a total of 3.00 from holding Regal Hotels International or generate 11.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Hotels International vs. Universal Display
Performance |
| Timeline |
| Regal Hotels Interna |
| Universal Display |
Regal Hotels and Universal Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Hotels and Universal Display
The main advantage of trading using opposite Regal Hotels and Universal Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Hotels position performs unexpectedly, Universal Display 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 Universal Display will offset losses from the drop in Universal Display's long position.| Regal Hotels vs. COSTCO WHOLESALE CDR | Regal Hotels vs. MARKET VECTR RETAIL | Regal Hotels vs. AEON STORES | Regal Hotels vs. Forsys Metals Corp |
| Universal Display vs. ecotel communication ag | Universal Display vs. Pebblebrook Hotel Trust | Universal Display vs. Regal Hotels International | Universal Display vs. DALATA HOTEL |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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