Correlation Between Regal Funds and Stelar Metals
Can any of the company-specific risk be diversified away by investing in both Regal Funds and Stelar 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 Stelar 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 Stelar Metals, you can compare the effects of market volatilities on Regal Funds and Stelar 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 Stelar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Stelar Metals.
Diversification Opportunities for Regal Funds and Stelar Metals
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Regal and Stelar is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Stelar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelar 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 Stelar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelar Metals has no effect on the direction of Regal Funds i.e., Regal Funds and Stelar Metals go up and down completely randomly.
Pair Corralation between Regal Funds and Stelar Metals
Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.67 times more return on investment than Stelar Metals. However, Regal Funds Management is 1.48 times less risky than Stelar Metals. It trades about 0.18 of its potential returns per unit of risk. Stelar Metals is currently generating about -0.29 per unit of risk. If you would invest 373.00 in Regal Funds Management on August 30, 2024 and sell it today you would earn a total of 30.00 from holding Regal Funds Management or generate 8.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Funds Management vs. Stelar Metals
Performance |
| Timeline |
| Regal Funds Management |
| Stelar Metals |
Regal Funds and Stelar Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and Stelar Metals
The main advantage of trading using opposite Regal Funds and Stelar Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Stelar 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 Stelar Metals will offset losses from the drop in Stelar Metals' long position.| Regal Funds vs. Champion Iron | Regal Funds vs. Ridley | Regal Funds vs. Peel Mining | Regal Funds vs. Australian Dairy Farms |
| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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