Correlation Between Berkeley Energy and Regal Funds
Can any of the company-specific risk be diversified away by investing in both Berkeley Energy and Regal Funds 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 Berkeley Energy and Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berkeley Energy and Regal Funds Management, you can compare the effects of market volatilities on Berkeley Energy and Regal Funds 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 Berkeley Energy with a short position of Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berkeley Energy and Regal Funds.
Diversification Opportunities for Berkeley Energy and Regal Funds
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Berkeley and Regal is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Berkeley Energy and Regal Funds Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Funds Management and Berkeley Energy 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 Berkeley Energy are associated (or correlated) with Regal Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Funds Management has no effect on the direction of Berkeley Energy i.e., Berkeley Energy and Regal Funds go up and down completely randomly.
Pair Corralation between Berkeley Energy and Regal Funds
Assuming the 90 days trading horizon Berkeley Energy is expected to under-perform the Regal Funds. In addition to that, Berkeley Energy is 1.9 times more volatile than Regal Funds Management. It trades about -0.02 of its total potential returns per unit of risk. Regal Funds Management is currently generating about 0.24 per unit of volatility. If you would invest 356.00 in Regal Funds Management on September 4, 2024 and sell it today you would earn a total of 37.00 from holding Regal Funds Management or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berkeley Energy vs. Regal Funds Management
Performance |
| Timeline |
| Berkeley Energy |
| Regal Funds Management |
Berkeley Energy and Regal Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berkeley Energy and Regal Funds
The main advantage of trading using opposite Berkeley Energy and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berkeley Energy position performs unexpectedly, Regal Funds 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 Regal Funds will offset losses from the drop in Regal Funds' long position.| Berkeley Energy vs. Regal Funds Management | Berkeley Energy vs. Infomedia | Berkeley Energy vs. Cleanaway Waste Management | Berkeley Energy vs. Microequities Asset Management |
| Regal Funds vs. Westpac Banking | Regal Funds vs. Ecofibre | Regal Funds vs. Adriatic Metals Plc | Regal Funds vs. Australian Dairy Farms |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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