Correlation Between Westpac Banking and Regal Funds
Can any of the company-specific risk be diversified away by investing in both Westpac Banking and Regal Funds 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 Westpac Banking and Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westpac Banking and Regal Funds Management, you can compare the effects of market volatilities on Westpac Banking and Regal Funds 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 Westpac Banking with a short position of Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westpac Banking and Regal Funds.
Diversification Opportunities for Westpac Banking and Regal Funds
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Westpac and Regal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Westpac Banking and Regal Funds Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Funds Management and Westpac Banking 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 Westpac Banking are associated (or correlated) with Regal Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Funds Management has no effect on the direction of Westpac Banking i.e., Westpac Banking and Regal Funds go up and down completely randomly.
Pair Corralation between Westpac Banking and Regal Funds
Assuming the 90 days trading horizon Westpac Banking is expected to generate 5.34 times less return on investment than Regal Funds. But when comparing it to its historical volatility, Westpac Banking is 6.84 times less risky than Regal Funds. It trades about 0.08 of its potential returns per unit of risk. Regal Funds Management is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 252.00 in Regal Funds Management on September 12, 2024 and sell it today you would earn a total of 131.00 from holding Regal Funds Management or generate 51.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westpac Banking vs. Regal Funds Management
Performance |
| Timeline |
| Westpac Banking |
| Regal Funds Management |
Westpac Banking and Regal Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westpac Banking and Regal Funds
The main advantage of trading using opposite Westpac Banking and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westpac Banking position performs unexpectedly, Regal Funds 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 Funds will offset losses from the drop in Regal Funds' long position.| Westpac Banking vs. Carnegie Clean Energy | Westpac Banking vs. Queste Communications | Westpac Banking vs. Gold Road Resources | Westpac Banking vs. Oneview Healthcare PLC |
| Regal Funds vs. Medibank Private | Regal Funds vs. Black Rock Mining | Regal Funds vs. Duxton Broadacre Farms | Regal Funds vs. Finexia Financial Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |