Correlation Between Regis Healthcare and Northern Star
Can any of the company-specific risk be diversified away by investing in both Regis Healthcare and Northern Star 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 Northern Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Healthcare and Northern Star Resources, you can compare the effects of market volatilities on Regis Healthcare and Northern Star 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 Northern Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Healthcare and Northern Star.
Diversification Opportunities for Regis Healthcare and Northern Star
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Regis and Northern is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Regis Healthcare and Northern Star Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Star 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 Northern Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Star Resources has no effect on the direction of Regis Healthcare i.e., Regis Healthcare and Northern Star go up and down completely randomly.
Pair Corralation between Regis Healthcare and Northern Star
Assuming the 90 days trading horizon Regis Healthcare is expected to generate 0.85 times more return on investment than Northern Star. However, Regis Healthcare is 1.17 times less risky than Northern Star. It trades about 0.03 of its potential returns per unit of risk. Northern Star Resources is currently generating about -0.02 per unit of risk. If you would invest 614.00 in Regis Healthcare on September 25, 2024 and sell it today you would earn a total of 12.00 from holding Regis Healthcare or generate 1.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.46% |
Values | Daily Returns |
Regis Healthcare vs. Northern Star Resources
Performance |
Timeline |
Regis Healthcare |
Northern Star Resources |
Regis Healthcare and Northern Star Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Regis Healthcare and Northern Star
The main advantage of trading using opposite Regis Healthcare and Northern Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Healthcare position performs unexpectedly, Northern Star 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 Northern Star will offset losses from the drop in Northern Star's long position.Regis Healthcare vs. Aneka Tambang Tbk | Regis Healthcare vs. BHP Group Limited | Regis Healthcare vs. Commonwealth Bank | Regis Healthcare vs. Commonwealth Bank of |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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