Correlation Between Regal Funds and Carlton Investments
Can any of the company-specific risk be diversified away by investing in both Regal Funds and Carlton Investments 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 Carlton Investments 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 Carlton Investments, you can compare the effects of market volatilities on Regal Funds and Carlton Investments 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 Carlton Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Carlton Investments.
Diversification Opportunities for Regal Funds and Carlton Investments
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Regal and Carlton is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Carlton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlton Investments 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 Carlton Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlton Investments has no effect on the direction of Regal Funds i.e., Regal Funds and Carlton Investments go up and down completely randomly.
Pair Corralation between Regal Funds and Carlton Investments
Assuming the 90 days trading horizon Regal Funds Management is expected to generate 2.13 times more return on investment than Carlton Investments. However, Regal Funds is 2.13 times more volatile than Carlton Investments. It trades about 0.21 of its potential returns per unit of risk. Carlton Investments is currently generating about 0.09 per unit of risk. If you would invest 373.00 in Regal Funds Management on August 30, 2024 and sell it today you would earn a total of 36.00 from holding Regal Funds Management or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Funds Management vs. Carlton Investments
Performance |
| Timeline |
| Regal Funds Management |
| Carlton Investments |
Regal Funds and Carlton Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and Carlton Investments
The main advantage of trading using opposite Regal Funds and Carlton Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Carlton Investments 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 Carlton Investments will offset losses from the drop in Carlton Investments' long position.| Regal Funds vs. Aurelia Metals | Regal Funds vs. Embark Education Group | Regal Funds vs. Bio Gene Technology | Regal Funds vs. Alto Metals |
| Carlton Investments vs. GQG Partners DRC | Carlton Investments vs. Metrics Master Income | Carlton Investments vs. L1 Long Short | Carlton Investments vs. Wam Leaders |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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