Correlation Between Regal Funds and BSP Financial
Can any of the company-specific risk be diversified away by investing in both Regal Funds and BSP Financial 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 Regal Funds and BSP Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regal Funds Management and BSP Financial Group, you can compare the effects of market volatilities on Regal Funds and BSP Financial 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 Regal Funds with a short position of BSP Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and BSP Financial.
Diversification Opportunities for Regal Funds and BSP Financial
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regal and BSP is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and BSP Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BSP Financial Group and Regal Funds 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 Regal Funds Management are associated (or correlated) with BSP Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BSP Financial Group has no effect on the direction of Regal Funds i.e., Regal Funds and BSP Financial go up and down completely randomly.
Pair Corralation between Regal Funds and BSP Financial
Assuming the 90 days trading horizon Regal Funds is expected to generate 3.08 times less return on investment than BSP Financial. In addition to that, Regal Funds is 1.29 times more volatile than BSP Financial Group. It trades about 0.02 of its total potential returns per unit of risk. BSP Financial Group is currently generating about 0.07 per unit of volatility. If you would invest 388.00 in BSP Financial Group on October 12, 2024 and sell it today you would earn a total of 312.00 from holding BSP Financial Group or generate 80.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Funds Management vs. BSP Financial Group
Performance |
| Timeline |
| Regal Funds Management |
| BSP Financial Group |
Regal Funds and BSP Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and BSP Financial
The main advantage of trading using opposite Regal Funds and BSP Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, BSP Financial 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 BSP Financial will offset losses from the drop in BSP Financial's long position.| Regal Funds vs. Black Rock Mining | Regal Funds vs. ACDC Metals | Regal Funds vs. Centaurus Metals | Regal Funds vs. Queste Communications |
| BSP Financial vs. Dexus Convenience Retail | BSP Financial vs. Regal Funds Management | BSP Financial vs. Ainsworth Game Technology | BSP Financial vs. Clime Investment Management |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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