Correlation Between Lindian Resources and Regal Funds
Can any of the company-specific risk be diversified away by investing in both Lindian Resources 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 Lindian Resources and Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lindian Resources and Regal Funds Management, you can compare the effects of market volatilities on Lindian Resources 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 Lindian Resources with a short position of Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lindian Resources and Regal Funds.
Diversification Opportunities for Lindian Resources and Regal Funds
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lindian and Regal is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Lindian Resources 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 Lindian Resources 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 Lindian Resources 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 Lindian Resources i.e., Lindian Resources and Regal Funds go up and down completely randomly.
Pair Corralation between Lindian Resources and Regal Funds
Assuming the 90 days trading horizon Lindian Resources is expected to generate 2.74 times more return on investment than Regal Funds. However, Lindian Resources is 2.74 times more volatile than Regal Funds Management. It trades about 0.01 of its potential returns per unit of risk. Regal Funds Management is currently generating about 0.03 per unit of risk. If you would invest 16.00 in Lindian Resources on September 3, 2024 and sell it today you would lose (6.40) from holding Lindian Resources or give up 40.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lindian Resources vs. Regal Funds Management
Performance |
| Timeline |
| Lindian Resources |
| Regal Funds Management |
Lindian Resources and Regal Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lindian Resources and Regal Funds
The main advantage of trading using opposite Lindian Resources and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lindian Resources 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.| Lindian Resources vs. Regal Funds Management | Lindian Resources vs. Step One Clothing | Lindian Resources vs. Ramsay Health Care | Lindian Resources vs. Regis Healthcare |
| Regal Funds vs. Audio Pixels Holdings | Regal Funds vs. Iodm | Regal Funds vs. Nsx | Regal Funds vs. TTG Fintech |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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