Correlation Between Regal Funds and Rio Tinto
Can any of the company-specific risk be diversified away by investing in both Regal Funds and Rio Tinto 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 Rio Tinto 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 Rio Tinto, you can compare the effects of market volatilities on Regal Funds and Rio Tinto 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 Rio Tinto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Rio Tinto.
Diversification Opportunities for Regal Funds and Rio Tinto
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regal and Rio is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Rio Tinto in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rio Tinto 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 Rio Tinto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rio Tinto has no effect on the direction of Regal Funds i.e., Regal Funds and Rio Tinto go up and down completely randomly.
Pair Corralation between Regal Funds and Rio Tinto
Assuming the 90 days trading horizon Regal Funds Management is expected to generate 1.73 times more return on investment than Rio Tinto. However, Regal Funds is 1.73 times more volatile than Rio Tinto. It trades about 0.02 of its potential returns per unit of risk. Rio Tinto is currently generating about 0.03 per unit of risk. If you would invest 324.00 in Regal Funds Management on September 14, 2024 and sell it today you would earn a total of 51.00 from holding Regal Funds Management or generate 15.74% 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. Rio Tinto
Performance |
| Timeline |
| Regal Funds Management |
| Rio Tinto |
Regal Funds and Rio Tinto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and Rio Tinto
The main advantage of trading using opposite Regal Funds and Rio Tinto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Rio Tinto 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 Rio Tinto will offset losses from the drop in Rio Tinto's long position.| Regal Funds vs. Audio Pixels Holdings | Regal Funds vs. Iodm | Regal Funds vs. Nsx | Regal Funds vs. TTG Fintech |
| Rio Tinto vs. Catalyst Metals | Rio Tinto vs. Hutchison Telecommunications | Rio Tinto vs. Gold Road Resources | Rio Tinto 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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