Correlation Between Stelar Metals and Regal Investment
Can any of the company-specific risk be diversified away by investing in both Stelar Metals 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 Stelar Metals and Regal Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Regal Investment, you can compare the effects of market volatilities on Stelar Metals 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 Stelar Metals with a short position of Regal Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Regal Investment.
Diversification Opportunities for Stelar Metals and Regal Investment
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stelar and Regal is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Regal Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Investment and Stelar Metals 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 Stelar Metals 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 Stelar Metals i.e., Stelar Metals and Regal Investment go up and down completely randomly.
Pair Corralation between Stelar Metals and Regal Investment
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Regal Investment. In addition to that, Stelar Metals is 4.59 times more volatile than Regal Investment. It trades about -0.07 of its total potential returns per unit of risk. Regal Investment is currently generating about 0.1 per unit of volatility. If you would invest 253.00 in Regal Investment on September 1, 2024 and sell it today you would earn a total of 89.00 from holding Regal Investment or generate 35.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Regal Investment
Performance |
| Timeline |
| Stelar Metals |
| Regal Investment |
Stelar Metals and Regal Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Regal Investment
The main advantage of trading using opposite Stelar Metals and Regal Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals 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.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Regal Investment vs. Queste Communications | Regal Investment vs. Sandon Capital Investments | Regal Investment vs. A1 Investments Resources | Regal Investment vs. Truscott Mining Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |