Correlation Between Regis Healthcare and OOhMedia

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

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

Diversification Opportunities for Regis Healthcare and OOhMedia

0.5

Correlation Coefficient

Regis Healthcare  OOhMedia

Very weak diversification

The 3 months correlation between Regis and OOhMedia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and OOhMedia go up and down completely randomly.

Pair Corralation between Regis Healthcare and OOhMedia

Assuming the 90 days trading horizon Regis Healthcare is expected to generate 1.02 times more return on investment than OOhMedia. However, Regis Healthcare is 1.02 times more volatile than oOhMedia. It trades about 0.13 of its potential returns per unit of risk. oOhMedia is currently generating about 0.0 per unit of risk. If you would invest  163.00  in Regis Healthcare on October 20, 2024 and sell it today you would earn a total of  453.00  from holding Regis Healthcare or generate 277.91% return on investment over 90 days.

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

Regis Healthcare  vs.  oOhMedia

Regis Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

oOhMedia

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in oOhMedia are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, OOhMedia 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 Regis Healthcare and OOhMedia

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

The idea behind Regis Healthcare and oOhMedia 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.