Correlation Between REGAL ASIAN and Beach Energy

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

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

Diversification Opportunities for REGAL ASIAN and Beach Energy

-0.49

Correlation Coefficient

REGAL ASIAN  Beach Energy

Very good diversification

The 3 months correlation between REGAL and Beach is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Beach Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Beach Energy and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS are associated (or correlated) with Beach Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Beach Energy has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Beach Energy go up and down completely randomly.

Pair Corralation between REGAL ASIAN and Beach Energy

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.62 times more return on investment than Beach Energy. However, REGAL ASIAN INVESTMENTS is 1.62 times less risky than Beach Energy. It trades about 0.02 of its potential returns per unit of risk. Beach Energy is currently generating about 0.0 per unit of risk. If you would invest  197.00  in REGAL ASIAN INVESTMENTS on October 4, 2024 and sell it today you would earn a total of  17.00  from holding REGAL ASIAN INVESTMENTS or generate 8.63% return on investment over 90 days.

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

REGAL ASIAN INVESTMENTS  vs.  Beach Energy

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days REGAL ASIAN INVESTMENTS has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Beach Energy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Beach Energy are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Beach Energy may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with REGAL ASIAN and Beach Energy

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

The idea behind REGAL ASIAN INVESTMENTS and Beach Energy 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 Stocks Directory module to find actively traded stocks across global markets.