Correlation Between Regal Funds and Retail Food
Can any of the company-specific risk be diversified away by investing in both Regal Funds and Retail Food 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 Retail Food 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 Retail Food Group, you can compare the effects of market volatilities on Regal Funds and Retail Food 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 Retail Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Retail Food.
Diversification Opportunities for Regal Funds and Retail Food
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regal and Retail is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Retail Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retail Food 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 Retail Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retail Food Group has no effect on the direction of Regal Funds i.e., Regal Funds and Retail Food go up and down completely randomly.
Pair Corralation between Regal Funds and Retail Food
Assuming the 90 days trading horizon Regal Funds is expected to generate 1.15 times less return on investment than Retail Food. But when comparing it to its historical volatility, Regal Funds Management is 1.35 times less risky than Retail Food. It trades about 0.18 of its potential returns per unit of risk. Retail Food Group is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6.70 in Retail Food Group on August 30, 2024 and sell it today you would earn a total of 0.60 from holding Retail Food Group or generate 8.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Funds Management vs. Retail Food Group
Performance |
| Timeline |
| Regal Funds Management |
| Retail Food Group |
Regal Funds and Retail Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and Retail Food
The main advantage of trading using opposite Regal Funds and Retail Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Retail Food 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 Retail Food will offset losses from the drop in Retail Food's long position.| Regal Funds vs. Champion Iron | Regal Funds vs. Ridley | Regal Funds vs. Peel Mining | Regal Funds vs. Australian Dairy Farms |
| Retail Food vs. Autosports Group | Retail Food vs. AiMedia Technologies | Retail Food vs. BKI Investment | Retail Food vs. ARN Media Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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