Correlation Between Regal Funds and West African
Can any of the company-specific risk be diversified away by investing in both Regal Funds and West African 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 West African 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 West African Resources, you can compare the effects of market volatilities on Regal Funds and West African 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 West African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and West African.
Diversification Opportunities for Regal Funds and West African
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Regal and West is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and West African Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on West African Resources 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 West African. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of West African Resources has no effect on the direction of Regal Funds i.e., Regal Funds and West African go up and down completely randomly.
Pair Corralation between Regal Funds and West African
Assuming the 90 days trading horizon Regal Funds is expected to generate 1.46 times less return on investment than West African. But when comparing it to its historical volatility, Regal Funds Management is 1.48 times less risky than West African. It trades about 0.08 of its potential returns per unit of risk. West African Resources is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 94.00 in West African Resources on September 12, 2024 and sell it today you would earn a total of 70.00 from holding West African Resources or generate 74.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Regal Funds Management vs. West African Resources
Performance |
| Timeline |
| Regal Funds Management |
| West African Resources |
Regal Funds and West African Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regal Funds and West African
The main advantage of trading using opposite Regal Funds and West African positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, West African 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 West African will offset losses from the drop in West African's long position.| Regal Funds vs. Medibank Private | Regal Funds vs. Black Rock Mining | Regal Funds vs. Duxton Broadacre Farms | Regal Funds vs. Finexia Financial Group |
| West African vs. Regal Funds Management | West African vs. Ras Technology Holdings | West African vs. Mach7 Technologies | West African vs. Falcon Metals |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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