Correlation Between REGAL ASIAN and Swatch Group

Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Swatch Group 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 Swatch Group 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 The Swatch Group, you can compare the effects of market volatilities on REGAL ASIAN and Swatch Group 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 Swatch Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Swatch Group.

Diversification Opportunities for REGAL ASIAN and Swatch Group

0.62

Correlation Coefficient

REGAL ASIAN  Swatch Group

Poor diversification

The 3 months correlation between REGAL and Swatch is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and The Swatch Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swatch Group 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 Swatch Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swatch Group has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Swatch Group go up and down completely randomly.

Pair Corralation between REGAL ASIAN and Swatch Group

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.59 times more return on investment than Swatch Group. However, REGAL ASIAN INVESTMENTS is 1.71 times less risky than Swatch Group. It trades about 0.03 of its potential returns per unit of risk. The Swatch Group is currently generating about 0.0 per unit of risk. If you would invest  111.00  in REGAL ASIAN INVESTMENTS on December 22, 2024 and sell it today you would earn a total of  2.00  from holding REGAL ASIAN INVESTMENTS or generate 1.8% return on investment over 90 days.

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

REGAL ASIAN INVESTMENTS  vs.  The Swatch Group

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in REGAL ASIAN INVESTMENTS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, REGAL ASIAN is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Swatch Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Swatch Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Swatch Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with REGAL ASIAN and Swatch Group

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

The idea behind REGAL ASIAN INVESTMENTS and The Swatch Group 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.

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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 Transaction History module to view history of all your transactions and understand their impact on performance.