Correlation Between Medibank Private and REGAL ASIAN

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

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

Diversification Opportunities for Medibank Private and REGAL ASIAN

0.13

Correlation Coefficient

Medibank Private  REGAL ASIAN

Average diversification

The 3 months correlation between Medibank and REGAL is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Medibank Private 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 Medibank Private 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 Medibank Private 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 Medibank Private i.e., Medibank Private and REGAL ASIAN go up and down completely randomly.

Pair Corralation between Medibank Private and REGAL ASIAN

Assuming the 90 days trading horizon Medibank Private is expected to generate 0.99 times more return on investment than REGAL ASIAN. However, Medibank Private is 1.01 times less risky than REGAL ASIAN. It trades about 0.18 of its potential returns per unit of risk. REGAL ASIAN INVESTMENTS is currently generating about 0.06 per unit of risk. If you would invest  374.00  in Medibank Private on December 21, 2024 and sell it today you would earn a total of  64.00  from holding Medibank Private or generate 17.11% return on investment over 90 days.

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

Medibank Private  vs.  REGAL ASIAN INVESTMENTS

Medibank Private

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Medibank Private are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Medibank Private unveiled solid returns over the last few months and may actually be approaching a breakup point.

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 4 (%) of all global equities and portfolios over the last 90 days. 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 Medibank Private and REGAL ASIAN

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

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.