Correlation Between Regal Funds and Strickland Metals
Can any of the company-specific risk be diversified away by investing in both Regal Funds and Strickland 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 Strickland 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 Strickland Metals, you can compare the effects of market volatilities on Regal Funds and Strickland 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 Strickland Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Strickland Metals.
Diversification Opportunities for Regal Funds and Strickland Metals
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Regal and Strickland is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Strickland Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strickland 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 Strickland Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strickland Metals has no effect on the direction of Regal Funds i.e., Regal Funds and Strickland Metals go up and down completely randomly.
Pair Corralation between Regal Funds and Strickland Metals
Assuming the 90 days trading horizon Regal Funds is expected to generate 2.13 times less return on investment than Strickland Metals. But when comparing it to its historical volatility, Regal Funds Management is 2.57 times less risky than Strickland Metals. It trades about 0.18 of its potential returns per unit of risk. Strickland Metals is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 7.00 in Strickland Metals on August 30, 2024 and sell it today you would earn a total of 1.10 from holding Strickland Metals or generate 15.71% 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. Strickland Metals
Performance |
| Timeline |
| Regal Funds Management |
| Strickland Metals |
Regal Funds and Strickland Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and Strickland Metals
The main advantage of trading using opposite Regal Funds and Strickland Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Strickland 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 Strickland Metals will offset losses from the drop in Strickland Metals' long position.| Regal Funds vs. Champion Iron | Regal Funds vs. Ridley | Regal Funds vs. Peel Mining | Regal Funds vs. Australian Dairy Farms |
| Strickland Metals vs. Northern Star Resources | Strickland Metals vs. Evolution Mining | Strickland Metals vs. Bluescope Steel | Strickland 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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