Correlation Between London City and REGAL ASIAN

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

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

Diversification Opportunities for London City and REGAL ASIAN

-0.43

Correlation Coefficient

London City  REGAL ASIAN

Very good diversification

The 3 months correlation between London and REGAL is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding London City Equities 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 London City 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 London City Equities 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 London City i.e., London City and REGAL ASIAN go up and down completely randomly.

Pair Corralation between London City and REGAL ASIAN

Assuming the 90 days trading horizon London City Equities is expected to generate 1.17 times more return on investment than REGAL ASIAN. However, London City is 1.17 times more volatile than REGAL ASIAN INVESTMENTS. It trades about 0.14 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  49.00  in London City Equities on October 7, 2024 and sell it today you would earn a total of  34.00  from holding London City Equities or generate 69.39% return on investment over 90 days.

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

London City Equities  vs.  REGAL ASIAN INVESTMENTS

London City Equities

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in London City Equities are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical and fundamental indicators, London City unveiled solid returns over the last few months and may actually be approaching a breakup point.

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REGAL ASIAN INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, REGAL ASIAN is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with London City and REGAL ASIAN

The main advantage of trading using opposite London City and REGAL ASIAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if London City 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 London City Equities 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 CEOs Directory module to screen CEOs from public companies around the world.