Correlation Between Regional Container and Advanced Information

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

By analyzing existing cross correlation between Regional Container Lines and Advanced Information Technology, you can compare the effects of market volatilities on Regional Container and Advanced Information 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 Regional Container with a short position of Advanced Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regional Container and Advanced Information.

Diversification Opportunities for Regional Container and Advanced Information

0.86

Correlation Coefficient

Regional Container  Advanced Information

Very poor diversification

The 3 months correlation between Regional and Advanced is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Regional Container Lines and Advanced Information Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Information and Regional Container 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 Regional Container Lines are associated (or correlated) with Advanced Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Information has no effect on the direction of Regional Container i.e., Regional Container and Advanced Information go up and down completely randomly.

Pair Corralation between Regional Container and Advanced Information

Assuming the 90 days trading horizon Regional Container Lines is expected to generate 1.33 times more return on investment than Advanced Information. However, Regional Container is 1.33 times more volatile than Advanced Information Technology. It trades about 0.18 of its potential returns per unit of risk. Advanced Information Technology is currently generating about 0.19 per unit of risk. If you would invest  2,290  in Regional Container Lines on April 22, 2025 and sell it today you would earn a total of  685.00  from holding Regional Container Lines or generate 29.91% return on investment over 90 days.

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

Regional Container Lines  vs.  Advanced Information Technolog

Regional Container Lines

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regional Container Lines are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting essential indicators, Regional Container disclosed solid returns over the last few months and may actually be approaching a breakup point.

Advanced Information

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Advanced Information Technology are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, Advanced Information disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regional Container and Advanced Information

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

The idea behind Regional Container Lines and Advanced Information Technology 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 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.