Correlation Between Regal Funds and Hutchison Telecommunicatio

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Can any of the company-specific risk be diversified away by investing in both Regal Funds and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio 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 Hutchison Telecommunications, you can compare the effects of market volatilities on Regal Funds and Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Hutchison Telecommunicatio.

Diversification Opportunities for Regal Funds and Hutchison Telecommunicatio

RegalHutchisonDiversified AwayRegalHutchisonDiversified Away100%
-0.3
  Correlation Coefficient

Very good diversification

The 3 months correlation between Regal and Hutchison is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Hutchison Telecommunications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hutchison Telecommunicatio 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 Hutchison Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hutchison Telecommunicatio has no effect on the direction of Regal Funds i.e., Regal Funds and Hutchison Telecommunicatio go up and down completely randomly.

Pair Corralation between Regal Funds and Hutchison Telecommunicatio

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.46 times more return on investment than Hutchison Telecommunicatio. However, Regal Funds Management is 2.17 times less risky than Hutchison Telecommunicatio. It trades about 0.18 of its potential returns per unit of risk. Hutchison Telecommunications is currently generating about 0.02 per unit of risk. If you would invest  376.00  in Regal Funds Management on November 23, 2024 and sell it today you would earn a total of  22.00  from holding Regal Funds Management or generate 5.85% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Regal Funds Management  vs.  Hutchison Telecommunications

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -10-50510
JavaScript chart by amCharts 3.21.15RPL HTA
       Timeline  
Regal Funds Management 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Regal Funds Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Regal Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb3.43.53.63.73.83.944.14.2
Hutchison Telecommunicatio 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Hutchison Telecommunications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Hutchison Telecommunicatio is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb0.0240.02450.0250.02550.0260.02650.0270.02750.028

Regal Funds and Hutchison Telecommunicatio Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.75-5.06-3.36-1.67-0.02831.673.45.146.878.6 0.020.030.040.050.060.070.08
JavaScript chart by amCharts 3.21.15RPL HTA
       Returns  

Pair Trading with Regal Funds and Hutchison Telecommunicatio

The main advantage of trading using opposite Regal Funds and Hutchison Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Hutchison Telecommunicatio 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 Hutchison Telecommunicatio will offset losses from the drop in Hutchison Telecommunicatio's long position.
The idea behind Regal Funds Management and Hutchison Telecommunications pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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