Correlation Between Regents Park and Cabana Target
Can any of the company-specific risk be diversified away by investing in both Regents Park and Cabana Target 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 Regents Park and Cabana Target into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regents Park Hedged and Cabana Target Leading, you can compare the effects of market volatilities on Regents Park and Cabana Target 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 Regents Park with a short position of Cabana Target. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regents Park and Cabana Target.
Diversification Opportunities for Regents Park and Cabana Target
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regents and Cabana is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Regents Park Hedged and Cabana Target Leading in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabana Target Leading and Regents Park 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 Regents Park Hedged are associated (or correlated) with Cabana Target. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabana Target Leading has no effect on the direction of Regents Park i.e., Regents Park and Cabana Target go up and down completely randomly.
Pair Corralation between Regents Park and Cabana Target
Given the investment horizon of 90 days Regents Park Hedged is expected to generate 1.04 times more return on investment than Cabana Target. However, Regents Park is 1.04 times more volatile than Cabana Target Leading. It trades about 0.11 of its potential returns per unit of risk. Cabana Target Leading is currently generating about 0.09 per unit of risk. If you would invest 968.00 in Regents Park Hedged on September 1, 2024 and sell it today you would earn a total of 107.00 from holding Regents Park Hedged or generate 11.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regents Park Hedged vs. Cabana Target Leading
Performance |
| Timeline |
| Regents Park Hedged |
| Cabana Target Leading |
Regents Park and Cabana Target Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regents Park and Cabana Target
The main advantage of trading using opposite Regents Park and Cabana Target positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regents Park position performs unexpectedly, Cabana Target 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 Cabana Target will offset losses from the drop in Cabana Target's long position.| Regents Park vs. iShares ESG Aware | Regents Park vs. iShares ESG Aware | Regents Park vs. iShares ESG Aware | Regents Park vs. iShares ESG Advanced |
| Cabana Target vs. iShares Core Growth | Cabana Target vs. ClearShares OCIO ETF | Cabana Target vs. Collaborative Investment Series | Cabana Target vs. Northern Lights |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |