Correlation Between REGAL ASIAN and CDN IMPERIAL
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and CDN IMPERIAL 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 CDN IMPERIAL 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 CDN IMPERIAL BANK, you can compare the effects of market volatilities on REGAL ASIAN and CDN IMPERIAL 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 CDN IMPERIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and CDN IMPERIAL.
Diversification Opportunities for REGAL ASIAN and CDN IMPERIAL
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between REGAL and CDN is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and CDN IMPERIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CDN IMPERIAL 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 CDN IMPERIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CDN IMPERIAL BANK has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and CDN IMPERIAL go up and down completely randomly.
Pair Corralation between REGAL ASIAN and CDN IMPERIAL
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 1.27 times more return on investment than CDN IMPERIAL. However, REGAL ASIAN is 1.27 times more volatile than CDN IMPERIAL BANK. It trades about 0.08 of its potential returns per unit of risk. CDN IMPERIAL BANK is currently generating about -0.03 per unit of risk. If you would invest 117.00 in REGAL ASIAN INVESTMENTS on December 4, 2024 and sell it today you would earn a total of 8.00 from holding REGAL ASIAN INVESTMENTS or generate 6.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. CDN IMPERIAL BANK
Performance |
Timeline |
REGAL ASIAN INVESTMENTS |
CDN IMPERIAL BANK |
REGAL ASIAN and CDN IMPERIAL Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with REGAL ASIAN and CDN IMPERIAL
The main advantage of trading using opposite REGAL ASIAN and CDN IMPERIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, CDN IMPERIAL 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 CDN IMPERIAL will offset losses from the drop in CDN IMPERIAL's long position.REGAL ASIAN vs. Ping An Insurance | REGAL ASIAN vs. Grupo Carso SAB | REGAL ASIAN vs. CARSALESCOM | REGAL ASIAN vs. GEELY AUTOMOBILE |
CDN IMPERIAL vs. Ribbon Communications | CDN IMPERIAL vs. Evolution Mining Limited | CDN IMPERIAL vs. Singapore Telecommunications Limited | CDN IMPERIAL vs. Eskay 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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