Correlation Between Universal Entertainment and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Universal Entertainment and REGAL ASIAN 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 Universal Entertainment and REGAL ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Entertainment and REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Universal Entertainment and REGAL ASIAN 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 Universal Entertainment with a short position of REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Entertainment and REGAL ASIAN.
Diversification Opportunities for Universal Entertainment and REGAL ASIAN
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Universal and REGAL is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Universal Entertainment and REGAL ASIAN INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGAL ASIAN INVESTMENTS and Universal Entertainment 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 Universal Entertainment are associated (or correlated) with REGAL ASIAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGAL ASIAN INVESTMENTS has no effect on the direction of Universal Entertainment i.e., Universal Entertainment and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Universal Entertainment and REGAL ASIAN
Assuming the 90 days trading horizon Universal Entertainment is expected to under-perform the REGAL ASIAN. In addition to that, Universal Entertainment is 3.75 times more volatile than REGAL ASIAN INVESTMENTS. It trades about -0.12 of its total potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about -0.38 per unit of volatility. If you would invest 138.00 in REGAL ASIAN INVESTMENTS on September 13, 2024 and sell it today you would lose (16.00) from holding REGAL ASIAN INVESTMENTS or give up 11.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Entertainment vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Universal Entertainment |
| REGAL ASIAN INVESTMENTS |
Universal Entertainment and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Entertainment and REGAL ASIAN
The main advantage of trading using opposite Universal Entertainment and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Entertainment position performs unexpectedly, REGAL ASIAN 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 REGAL ASIAN will offset losses from the drop in REGAL ASIAN's long position.| Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc | Universal Entertainment vs. Apple Inc |
| REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc | REGAL ASIAN vs. Apple Inc |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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