Correlation Between Sims and Regal Investment
Can any of the company-specific risk be diversified away by investing in both Sims and Regal Investment 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 Sims and Regal Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sims and Regal Investment, you can compare the effects of market volatilities on Sims and Regal Investment 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 Sims with a short position of Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sims and Regal Investment.
Diversification Opportunities for Sims and Regal Investment
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sims and Regal is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Sims and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment and Sims 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 Sims are associated (or correlated) with Regal Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Investment has no effect on the direction of Sims i.e., Sims and Regal Investment go up and down completely randomly.
Pair Corralation between Sims and Regal Investment
Assuming the 90 days trading horizon Sims is expected to under-perform the Regal Investment. In addition to that, Sims is 1.64 times more volatile than Regal Investment. It trades about 0.0 of its total potential returns per unit of risk. Regal Investment is currently generating about 0.09 per unit of volatility. If you would invest 259.00 in Regal Investment on September 5, 2024 and sell it today you would earn a total of 79.00 from holding Regal Investment or generate 30.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sims vs. Regal Investment
Performance |
| Timeline |
| Sims |
| Regal Investment |
Sims and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sims and Regal Investment
The main advantage of trading using opposite Sims and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims position performs unexpectedly, Regal Investment 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 Investment will offset losses from the drop in Regal Investment's long position.| Sims vs. Flagship Investments | Sims vs. Australian United Investment | Sims vs. REGAL ASIAN INVESTMENTS | Sims vs. Gold Road Resources |
| Regal Investment vs. ABACUS STORAGE KING | Regal Investment vs. Odyssey Energy | Regal Investment vs. JB Hi Fi | Regal Investment vs. Sims |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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