Correlation Between Regal Funds and Platinum Asia
Can any of the company-specific risk be diversified away by investing in both Regal Funds and Platinum Asia 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 Platinum Asia 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 Platinum Asia Investments, you can compare the effects of market volatilities on Regal Funds and Platinum Asia 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 Platinum Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Platinum Asia.
Diversification Opportunities for Regal Funds and Platinum Asia
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Regal and Platinum is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Platinum Asia Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Platinum Asia 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 Platinum Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Platinum Asia Investments has no effect on the direction of Regal Funds i.e., Regal Funds and Platinum Asia go up and down completely randomly.
Pair Corralation between Regal Funds and Platinum Asia
Assuming the 90 days trading horizon Regal Funds Management is expected to generate 1.68 times more return on investment than Platinum Asia. However, Regal Funds is 1.68 times more volatile than Platinum Asia Investments. It trades about 0.11 of its potential returns per unit of risk. Platinum Asia Investments is currently generating about -0.31 per unit of risk. If you would invest 383.00 in Regal Funds Management on August 28, 2024 and sell it today you would earn a total of 19.00 from holding Regal Funds Management or generate 4.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Funds Management vs. Platinum Asia Investments
Performance |
| Timeline |
| Regal Funds Management |
| Platinum Asia Investments |
Regal Funds and Platinum Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and Platinum Asia
The main advantage of trading using opposite Regal Funds and Platinum Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Platinum Asia 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 Platinum Asia will offset losses from the drop in Platinum Asia's long position.| Regal Funds vs. National Australia Bank | Regal Funds vs. National Australia Bank | Regal Funds vs. Westpac Banking | Regal Funds vs. National Australia Bank |
| Platinum Asia vs. Stelar Metals | Platinum Asia vs. Centaurus Metals | Platinum Asia vs. Perseus Mining | Platinum Asia vs. Regal Funds 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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