Correlation Between Regional Container and Begistics Public

Can any of the company-specific risk be diversified away by investing in both Regional Container and Begistics Public 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 Regional Container and Begistics Public into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Regional Container Lines and Begistics Public, you can compare the effects of market volatilities on Regional Container and Begistics Public 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 Regional Container with a short position of Begistics Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Begistics Public.

Diversification Opportunities for Regional Container and Begistics Public

-0.32

Correlation Coefficient

Regional Container  Begistics Public

Very good diversification

The 3 months correlation between Regional and Begistics is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and Begistics Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Begistics Public and Regional Container 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 Regional Container Lines are associated (or correlated) with Begistics Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Begistics Public has no effect on the direction of Regional Container i.e., Regional Container and Begistics Public go up and down completely randomly.

Pair Corralation between Regional Container and Begistics Public

Assuming the 90 days trading horizon Regional Container Lines is expected to generate 0.42 times more return on investment than Begistics Public. However, Regional Container Lines is 2.4 times less risky than Begistics Public. It trades about 0.1 of its potential returns per unit of risk. Begistics Public is currently generating about 0.03 per unit of risk. If you would invest  2,478  in Regional Container Lines on September 26, 2024 and sell it today you would earn a total of  272.00  from holding Regional Container Lines or generate 10.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	97.56%
Values	Daily Returns

Regional Container Lines  vs.  Begistics Public

Regional Container Lines

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regional Container Lines are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Regional Container may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Begistics Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Begistics Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Begistics Public is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Regional Container and Begistics Public

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

The idea behind Regional Container Lines and Begistics Public 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.