Correlation Between Toys R and REGAL ASIAN
Can any of the company-specific risk be diversified away by investing in both Toys R 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 Toys R and REGAL ASIAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Toys R Us and REGAL ASIAN INVESTMENTS, you can compare the effects of market volatilities on Toys R 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 Toys R with a short position of REGAL ASIAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Toys R and REGAL ASIAN.
Diversification Opportunities for Toys R and REGAL ASIAN
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Toys and REGAL is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Toys R Us 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 Toys R 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 Toys R Us 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 Toys R i.e., Toys R and REGAL ASIAN go up and down completely randomly.
Pair Corralation between Toys R and REGAL ASIAN
Assuming the 90 days trading horizon Toys R Us is expected to under-perform the REGAL ASIAN. In addition to that, Toys R is 2.76 times more volatile than REGAL ASIAN INVESTMENTS. It trades about -0.2 of its total potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.05 per unit of volatility. If you would invest 206.00 in REGAL ASIAN INVESTMENTS on August 29, 2024 and sell it today you would earn a total of 9.00 from holding REGAL ASIAN INVESTMENTS or generate 4.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Toys R Us vs. REGAL ASIAN INVESTMENTS
Performance |
| Timeline |
| Toys R Us |
| REGAL ASIAN INVESTMENTS |
Toys R and REGAL ASIAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Toys R and REGAL ASIAN
The main advantage of trading using opposite Toys R and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Toys R 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.The idea behind Toys R Us and REGAL ASIAN INVESTMENTS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| REGAL ASIAN vs. ABACUS STORAGE KING | REGAL ASIAN vs. Odyssey Energy | REGAL ASIAN vs. Champion Iron | REGAL ASIAN vs. Ridley |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |