Correlation Between REGAL ASIAN and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and Centaurus Metals 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 Centaurus Metals 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 Centaurus Metals, you can compare the effects of market volatilities on REGAL ASIAN and Centaurus Metals 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 Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and Centaurus Metals.
Diversification Opportunities for REGAL ASIAN and Centaurus Metals
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between REGAL and Centaurus is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals 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 Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Centaurus Metals go up and down completely randomly.
Pair Corralation between REGAL ASIAN and Centaurus Metals
Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 0.51 times more return on investment than Centaurus Metals. However, REGAL ASIAN INVESTMENTS is 1.98 times less risky than Centaurus Metals. It trades about -0.02 of its potential returns per unit of risk. Centaurus Metals is currently generating about -0.15 per unit of risk. If you would invest 207.00 in REGAL ASIAN INVESTMENTS on October 11, 2024 and sell it today you would lose (2.00) from holding REGAL ASIAN INVESTMENTS or give up 0.97% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 95.0% |
Values | Daily Returns |
REGAL ASIAN INVESTMENTS vs. Centaurus Metals
Performance |
Timeline |
REGAL ASIAN INVESTMENTS |
Centaurus Metals |
REGAL ASIAN and Centaurus Metals Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with REGAL ASIAN and Centaurus Metals
The main advantage of trading using opposite REGAL ASIAN and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL ASIAN position performs unexpectedly, Centaurus Metals 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 Centaurus Metals will offset losses from the drop in Centaurus Metals' long position.REGAL ASIAN vs. Medibank Private | REGAL ASIAN vs. AiMedia Technologies | REGAL ASIAN vs. Insurance Australia Group | REGAL ASIAN vs. ARN Media Limited |
Centaurus Metals vs. Air New Zealand | Centaurus Metals vs. Ainsworth Game Technology | Centaurus Metals vs. Dug Technology | Centaurus Metals vs. Hansen Technologies |
Check out your portfolio center.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.
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