Correlation Between Regal Funds and Talisman Mining
Can any of the company-specific risk be diversified away by investing in both Regal Funds and Talisman Mining 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 Talisman Mining 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 Talisman Mining, you can compare the effects of market volatilities on Regal Funds and Talisman Mining 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 Talisman Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Talisman Mining.
Diversification Opportunities for Regal Funds and Talisman Mining
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Regal and Talisman is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Talisman Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talisman Mining 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 Talisman Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talisman Mining has no effect on the direction of Regal Funds i.e., Regal Funds and Talisman Mining go up and down completely randomly.
Pair Corralation between Regal Funds and Talisman Mining
Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.43 times more return on investment than Talisman Mining. However, Regal Funds Management is 2.31 times less risky than Talisman Mining. It trades about 0.2 of its potential returns per unit of risk. Talisman Mining is currently generating about -0.1 per unit of risk. If you would invest 370.00 in Regal Funds Management on September 1, 2024 and sell it today you would earn a total of 33.00 from holding Regal Funds Management or generate 8.92% 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. Talisman Mining
Performance |
| Timeline |
| Regal Funds Management |
| Talisman Mining |
Regal Funds and Talisman Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and Talisman Mining
The main advantage of trading using opposite Regal Funds and Talisman Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Talisman Mining 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 Talisman Mining will offset losses from the drop in Talisman Mining's long position.| Regal Funds vs. Ras Technology Holdings | Regal Funds vs. Macquarie Technology Group | Regal Funds vs. Bisalloy Steel Group | Regal Funds vs. Richmond Vanadium Technology |
| Talisman Mining vs. Northern Star Resources | Talisman Mining vs. Evolution Mining | Talisman Mining vs. Bluescope Steel | Talisman Mining 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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