Correlation Between REGAL ASIAN and ECHO INVESTMENT

Can any of the company-specific risk be diversified away by investing in both REGAL ASIAN and ECHO INVESTMENT 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 ECHO INVESTMENT 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 ECHO INVESTMENT ZY, you can compare the effects of market volatilities on REGAL ASIAN and ECHO INVESTMENT 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 ECHO INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL ASIAN and ECHO INVESTMENT.

Diversification Opportunities for REGAL ASIAN and ECHO INVESTMENT

0.58

Correlation Coefficient

REGAL ASIAN  ECHO INVESTMENT

Very weak diversification

The 3 months correlation between REGAL and ECHO is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and ECHO INVESTMENT ZY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECHO INVESTMENT ZY 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 ECHO INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECHO INVESTMENT ZY has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and ECHO INVESTMENT go up and down completely randomly.

Pair Corralation between REGAL ASIAN and ECHO INVESTMENT

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to generate 1.0 times more return on investment than ECHO INVESTMENT. However, REGAL ASIAN is 1.0 times more volatile than ECHO INVESTMENT ZY. It trades about 0.21 of its potential returns per unit of risk. ECHO INVESTMENT ZY is currently generating about 0.09 per unit of risk. If you would invest  89.00  in REGAL ASIAN INVESTMENTS on April 24, 2025 and sell it today you would earn a total of  21.00  from holding REGAL ASIAN INVESTMENTS or generate 23.6% return on investment over 90 days.

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

REGAL ASIAN INVESTMENTS  vs.  ECHO INVESTMENT ZY

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in REGAL ASIAN INVESTMENTS are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, REGAL ASIAN reported solid returns over the last few months and may actually be approaching a breakup point.

ECHO INVESTMENT ZY

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ECHO INVESTMENT ZY are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, ECHO INVESTMENT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with REGAL ASIAN and ECHO INVESTMENT

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

The idea behind REGAL ASIAN INVESTMENTS and ECHO INVESTMENT ZY 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.