Correlation Between Environmental and Regal Funds
Can any of the company-specific risk be diversified away by investing in both Environmental 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 Environmental and Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Environmental Group and Regal Funds Management, you can compare the effects of market volatilities on Environmental 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 Environmental with a short position of Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Environmental and Regal Funds.
Diversification Opportunities for Environmental and Regal Funds
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Environmental and Regal is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding The Environmental Group 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 Environmental 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 The Environmental Group 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 Environmental i.e., Environmental and Regal Funds go up and down completely randomly.
Pair Corralation between Environmental and Regal Funds
Assuming the 90 days trading horizon The Environmental Group is expected to generate 1.33 times more return on investment than Regal Funds. However, Environmental is 1.33 times more volatile than Regal Funds Management. It trades about 0.07 of its potential returns per unit of risk. Regal Funds Management is currently generating about -0.04 per unit of risk. If you would invest 28.00 in The Environmental Group on October 12, 2024 and sell it today you would earn a total of 1.00 from holding The Environmental Group or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Environmental Group vs. Regal Funds Management
Performance |
| Timeline |
| The Environmental |
| Regal Funds Management |
Environmental and Regal Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Environmental and Regal Funds
The main advantage of trading using opposite Environmental and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Environmental 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.| Environmental vs. Event Hospitality and | Environmental vs. Epsilon Healthcare | Environmental vs. Falcon Metals | Environmental vs. Sonic Healthcare |
| Regal Funds vs. Stelar Metals | Regal Funds vs. Everest Metals | Regal Funds vs. ACDC Metals | Regal Funds vs. Autosports Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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