Correlation Between Regis Healthcare and Lotus Resources

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

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

Diversification Opportunities for Regis Healthcare and Lotus Resources

0.0

Correlation Coefficient

Regis Healthcare  Lotus Resources

Pay attention - limited upside

The 3 months correlation between Regis and Lotus is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Lotus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Resources and Regis Healthcare 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 Regis Healthcare are associated (or correlated) with Lotus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Resources has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Lotus Resources go up and down completely randomly.

Pair Corralation between Regis Healthcare and Lotus Resources

Assuming the 90 days trading horizon Regis Healthcare is expected to generate 0.39 times more return on investment than Lotus Resources. However, Regis Healthcare is 2.55 times less risky than Lotus Resources. It trades about 0.17 of its potential returns per unit of risk. Lotus Resources is currently generating about -0.07 per unit of risk. If you would invest  437.00  in Regis Healthcare on September 19, 2024 and sell it today you would earn a total of  227.00  from holding Regis Healthcare or generate 51.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.22%
Values	Daily Returns

Regis Healthcare  vs.  Lotus Resources

Regis Healthcare

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regis Healthcare are ranked lower than 9 (%) 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.

Lotus Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lotus Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Regis Healthcare and Lotus Resources

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

The idea behind Regis Healthcare and Lotus Resources 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.