Correlation Between REGAL HOTEL and Pure Storage
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL and Pure Storage 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 HOTEL and Pure Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL HOTEL INTL and Pure Storage, you can compare the effects of market volatilities on REGAL HOTEL and Pure Storage 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 HOTEL with a short position of Pure Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and Pure Storage.
Diversification Opportunities for REGAL HOTEL and Pure Storage
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between REGAL and Pure is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and Pure Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pure Storage and REGAL HOTEL 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 HOTEL INTL are associated (or correlated) with Pure Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pure Storage has no effect on the direction of REGAL HOTEL i.e., REGAL HOTEL and Pure Storage go up and down completely randomly.
Pair Corralation between REGAL HOTEL and Pure Storage
Assuming the 90 days trading horizon REGAL HOTEL INTL is expected to generate 1.1 times more return on investment than Pure Storage. However, REGAL HOTEL is 1.1 times more volatile than Pure Storage. It trades about 0.08 of its potential returns per unit of risk. Pure Storage is currently generating about 0.09 per unit of risk. If you would invest 28.00 in REGAL HOTEL INTL on October 10, 2024 and sell it today you would earn a total of 1.00 from holding REGAL HOTEL INTL or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. Pure Storage
Performance |
| Timeline |
| REGAL HOTEL INTL |
| Pure Storage |
REGAL HOTEL and Pure Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and Pure Storage
The main advantage of trading using opposite REGAL HOTEL and Pure Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL position performs unexpectedly, Pure Storage 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 Pure Storage will offset losses from the drop in Pure Storage's long position.| REGAL HOTEL vs. Insteel Industries | REGAL HOTEL vs. Constellation Software | REGAL HOTEL vs. Unity Software | REGAL HOTEL vs. Magic Software Enterprises |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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