Correlation Between Regal Funds and DY6 Metals
Can any of the company-specific risk be diversified away by investing in both Regal Funds and DY6 Metals 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 DY6 Metals 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 DY6 Metals, you can compare the effects of market volatilities on Regal Funds and DY6 Metals 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 DY6 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and DY6 Metals.
Diversification Opportunities for Regal Funds and DY6 Metals
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Regal and DY6 is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and DY6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DY6 Metals 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 DY6 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DY6 Metals has no effect on the direction of Regal Funds i.e., Regal Funds and DY6 Metals go up and down completely randomly.
Pair Corralation between Regal Funds and DY6 Metals
Assuming the 90 days trading horizon Regal Funds is expected to generate 3.73 times less return on investment than DY6 Metals. But when comparing it to its historical volatility, Regal Funds Management is 8.21 times less risky than DY6 Metals. It trades about 0.03 of its potential returns per unit of risk. DY6 Metals is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 24.00 in DY6 Metals on August 26, 2024 and sell it today you would lose (19.00) from holding DY6 Metals or give up 79.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 72.0% |
| Values | Daily Returns |
Regal Funds Management vs. DY6 Metals
Performance |
| Timeline |
| Regal Funds Management |
| DY6 Metals |
Regal Funds and DY6 Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and DY6 Metals
The main advantage of trading using opposite Regal Funds and DY6 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, DY6 Metals 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 DY6 Metals will offset losses from the drop in DY6 Metals' long position.| Regal Funds vs. Kneomedia | Regal Funds vs. Patriot Battery Metals | Regal Funds vs. COAST ENTERTAINMENT HOLDINGS | Regal Funds vs. Leeuwin Metals |
| DY6 Metals vs. Northern Star Resources | DY6 Metals vs. Evolution Mining | DY6 Metals vs. Bluescope Steel | DY6 Metals vs. Sandfire Resources NL |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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