Correlation Between Mantle Minerals and Regis Healthcare

Can any of the company-specific risk be diversified away by investing in both Mantle Minerals and Regis Healthcare 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 Mantle Minerals and Regis Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mantle Minerals Limited and Regis Healthcare, you can compare the effects of market volatilities on Mantle Minerals and Regis Healthcare 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 Mantle Minerals with a short position of Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mantle Minerals and Regis Healthcare.

Diversification Opportunities for Mantle Minerals and Regis Healthcare

0.04

Correlation Coefficient

Mantle Minerals  Regis Healthcare

Significant diversification

The 3 months correlation between Mantle and Regis is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Mantle Minerals Limited and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare and Mantle Minerals 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 Mantle Minerals Limited are associated (or correlated) with Regis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Healthcare has no effect on the direction of Mantle Minerals i.e., Mantle Minerals and Regis Healthcare go up and down completely randomly.

Pair Corralation between Mantle Minerals and Regis Healthcare

Assuming the 90 days trading horizon Mantle Minerals Limited is expected to generate 12.18 times more return on investment than Regis Healthcare. However, Mantle Minerals is 12.18 times more volatile than Regis Healthcare. It trades about 0.09 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.18 per unit of risk. If you would invest  0.15  in Mantle Minerals Limited on September 11, 2024 and sell it today you would lose (0.05) from holding Mantle Minerals Limited or give up 33.33% of portfolio value over 90 days.

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

Mantle Minerals Limited  vs.  Regis Healthcare

Mantle Minerals

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Mantle Minerals Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Mantle Minerals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Regis Healthcare

Risk-Adjusted Performance

14 of 100

Good

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

Pair Trading with Mantle Minerals and Regis Healthcare

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

The idea behind Mantle Minerals Limited and Regis Healthcare 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.