Correlation Between REGAL ASIAN and ALIOR BANK

Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and ALIOR BANK 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 REGAL ASIAN and ALIOR BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between REGAL ASIAN INVESTMENTS and ALIOR BANK, you can compare the effects of market volatilities on REGAL ASIAN and ALIOR BANK 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 REGAL ASIAN with a short position of ALIOR BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and ALIOR BANK.

Diversification Opportunities for REGAL ASIAN and ALIOR BANK

0.82

Correlation Coefficient

REGAL ASIAN  ALIOR BANK

Very poor diversification

The 3 months correlation between REGAL and ALIOR is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and ALIOR BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIOR BANK and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS are associated (or correlated) with ALIOR BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIOR BANK has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and ALIOR BANK go up and down completely randomly.

Pair Corralation between REGAL ASIAN and ALIOR BANK

Assuming the 90 days trading horizon REGAL ASIAN is expected to generate 1.14 times less return on investment than ALIOR BANK. But when comparing it to its historical volatility, REGAL ASIAN INVESTMENTS is 1.05 times less risky than ALIOR BANK. It trades about 0.08 of its potential returns per unit of risk. ALIOR BANK is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,090  in ALIOR BANK on December 4, 2024 and sell it today you would earn a total of  164.00  from holding ALIOR BANK or generate 7.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

REGAL ASIAN INVESTMENTS  vs.  ALIOR BANK

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in REGAL ASIAN INVESTMENTS are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, REGAL ASIAN may actually be approaching a critical reversion point that can send shares even higher in April 2025.

ALIOR BANK

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ALIOR BANK are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, ALIOR BANK may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with REGAL ASIAN and ALIOR BANK

The main advantage of trading using opposite REGAL ASIAN and ALIOR BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, ALIOR BANK 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 ALIOR BANK will offset losses from the drop in ALIOR BANK's long position.

The idea behind REGAL ASIAN INVESTMENTS and ALIOR BANK 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.

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.