Correlation Between Global Health and REGAL ASIAN

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

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

Diversification Opportunities for Global Health and REGAL ASIAN

0.4

Correlation Coefficient

Global Health  REGAL ASIAN

Very weak diversification

The 3 months correlation between Global and REGAL is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Global Health 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 Global Health 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 Global Health 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 Global Health i.e., Global Health and REGAL ASIAN go up and down completely randomly.

Pair Corralation between Global Health and REGAL ASIAN

Assuming the 90 days trading horizon Global Health is expected to generate 4.04 times more return on investment than REGAL ASIAN. However, Global Health is 4.04 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.02 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.02 per unit of risk. If you would invest  17.00  in Global Health on September 17, 2024 and sell it today you would lose (3.00) from holding Global Health or give up 17.65% of portfolio value over 90 days.

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

Global Health  vs.  REGAL ASIAN INVESTMENTS

Global Health

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Global Health are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical indicators, Global Health is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

5 of 100

Modest

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. In spite of comparatively weak basic indicators, REGAL ASIAN may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Global Health and REGAL ASIAN

The main advantage of trading using opposite Global Health and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Health 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 Global Health 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.

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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.