Correlation Between RaySearch Laboratories and Regen BioPharma
Can any of the company-specific risk be diversified away by investing in both RaySearch Laboratories and Regen BioPharma 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 RaySearch Laboratories and Regen BioPharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RaySearch Laboratories AB and Regen BioPharma, you can compare the effects of market volatilities on RaySearch Laboratories and Regen BioPharma 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 RaySearch Laboratories with a short position of Regen BioPharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of RaySearch Laboratories and Regen BioPharma.
Diversification Opportunities for RaySearch Laboratories and Regen BioPharma
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between RaySearch and Regen is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding RaySearch Laboratories AB and Regen BioPharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regen BioPharma and RaySearch Laboratories 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 RaySearch Laboratories AB are associated (or correlated) with Regen BioPharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regen BioPharma has no effect on the direction of RaySearch Laboratories i.e., RaySearch Laboratories and Regen BioPharma go up and down completely randomly.
Pair Corralation between RaySearch Laboratories and Regen BioPharma
Assuming the 90 days horizon RaySearch Laboratories AB is expected to generate 0.2 times more return on investment than Regen BioPharma. However, RaySearch Laboratories AB is 5.09 times less risky than Regen BioPharma. It trades about 0.24 of its potential returns per unit of risk. Regen BioPharma is currently generating about 0.01 per unit of risk. If you would invest 2,000 in RaySearch Laboratories AB on December 14, 2024 and sell it today you would earn a total of 575.00 from holding RaySearch Laboratories AB or generate 28.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
RaySearch Laboratories AB vs. Regen BioPharma
Performance |
| Timeline |
| RaySearch Laboratories |
| Regen BioPharma |
RaySearch Laboratories and Regen BioPharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RaySearch Laboratories and Regen BioPharma
The main advantage of trading using opposite RaySearch Laboratories and Regen BioPharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RaySearch Laboratories position performs unexpectedly, Regen BioPharma 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 Regen BioPharma will offset losses from the drop in Regen BioPharma's long position.| RaySearch Laboratories vs. Schrodinger | ||
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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