Correlation Between Leeuwin Metals and Regal Funds
Can any of the company-specific risk be diversified away by investing in both Leeuwin Metals 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 Leeuwin Metals and Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leeuwin Metals and Regal Funds Management, you can compare the effects of market volatilities on Leeuwin Metals 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 Leeuwin Metals with a short position of Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leeuwin Metals and Regal Funds.
Diversification Opportunities for Leeuwin Metals and Regal Funds
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Leeuwin and Regal is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Leeuwin Metals 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 Leeuwin Metals 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 Leeuwin Metals 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 Leeuwin Metals i.e., Leeuwin Metals and Regal Funds go up and down completely randomly.
Pair Corralation between Leeuwin Metals and Regal Funds
Assuming the 90 days trading horizon Leeuwin Metals is expected to under-perform the Regal Funds. In addition to that, Leeuwin Metals is 2.46 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 0.03 per unit of volatility. If you would invest 328.00 in Regal Funds Management on August 30, 2024 and sell it today you would earn a total of 75.00 from holding Regal Funds Management or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.94% |
| Values | Daily Returns |
Leeuwin Metals vs. Regal Funds Management
Performance |
| Timeline |
| Leeuwin Metals |
| Regal Funds Management |
Leeuwin Metals and Regal Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leeuwin Metals and Regal Funds
The main advantage of trading using opposite Leeuwin Metals and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leeuwin Metals 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.| Leeuwin Metals vs. Queste Communications | Leeuwin Metals vs. Apiam Animal Health | Leeuwin Metals vs. Austco Healthcare | Leeuwin Metals vs. TPG Telecom |
| Regal Funds vs. Champion Iron | Regal Funds vs. Ridley | Regal Funds vs. Peel Mining | 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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