Correlation Between REGAL HOTEL and VIRG NATL
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL and VIRG NATL 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 VIRG NATL 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 VIRG NATL BANKSH, you can compare the effects of market volatilities on REGAL HOTEL and VIRG NATL 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 VIRG NATL. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and VIRG NATL.
Diversification Opportunities for REGAL HOTEL and VIRG NATL
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between REGAL and VIRG is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and VIRG NATL BANKSH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRG NATL BANKSH 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 VIRG NATL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRG NATL BANKSH has no effect on the direction of REGAL HOTEL i.e., REGAL HOTEL and VIRG NATL go up and down completely randomly.
Pair Corralation between REGAL HOTEL and VIRG NATL
Assuming the 90 days trading horizon REGAL HOTEL is expected to generate 36.26 times less return on investment than VIRG NATL. But when comparing it to its historical volatility, REGAL HOTEL INTL is 1.94 times less risky than VIRG NATL. It trades about 0.01 of its potential returns per unit of risk. VIRG NATL BANKSH is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 3,600 in VIRG NATL BANKSH on August 31, 2024 and sell it today you would earn a total of 300.00 from holding VIRG NATL BANKSH or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. VIRG NATL BANKSH
Performance |
| Timeline |
| REGAL HOTEL INTL |
| VIRG NATL BANKSH |
REGAL HOTEL and VIRG NATL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and VIRG NATL
The main advantage of trading using opposite REGAL HOTEL and VIRG NATL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL position performs unexpectedly, VIRG NATL 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 VIRG NATL will offset losses from the drop in VIRG NATL's long position.| REGAL HOTEL vs. Webster Financial | REGAL HOTEL vs. OFFICE DEPOT | REGAL HOTEL vs. Haier Smart Home | REGAL HOTEL vs. National Bank Holdings |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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