Correlation Between Austco Healthcare and Regal Funds

Can any of the company-specific risk be diversified away by investing in both Austco Healthcare and Regal Funds 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 Austco Healthcare and Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Austco Healthcare and Regal Funds Management, you can compare the effects of market volatilities on Austco Healthcare and Regal Funds 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 Austco Healthcare with a short position of Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Austco Healthcare and Regal Funds.

Diversification Opportunities for Austco Healthcare and Regal Funds

-0.48

Correlation Coefficient

Austco Healthcare  Regal Funds

Very good diversification

The 3 months correlation between Austco and Regal is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Austco Healthcare and Regal Funds Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Funds Management and Austco Healthcare 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 Austco Healthcare are associated (or correlated) with Regal Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Funds Management has no effect on the direction of Austco Healthcare i.e., Austco Healthcare and Regal Funds go up and down completely randomly.

Pair Corralation between Austco Healthcare and Regal Funds

Assuming the 90 days trading horizon Austco Healthcare is expected to generate 1.17 times more return on investment than Regal Funds. However, Austco Healthcare is 1.17 times more volatile than Regal Funds Management. It trades about 0.39 of its potential returns per unit of risk. Regal Funds Management is currently generating about -0.06 per unit of risk. If you would invest  25.00  in Austco Healthcare on October 11, 2024 and sell it today you would earn a total of  6.00  from holding Austco Healthcare or generate 24.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Austco Healthcare  vs.  Regal Funds Management

Austco Healthcare

Risk-Adjusted Performance

12 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Austco Healthcare are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Austco Healthcare unveiled solid returns over the last few months and may actually be approaching a breakup point.

Regal Funds Management

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Regal Funds Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Regal Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Austco Healthcare and Regal Funds

The main advantage of trading using opposite Austco Healthcare and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Austco Healthcare position performs unexpectedly, Regal Funds 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 Regal Funds will offset losses from the drop in Regal Funds' long position.

The idea behind Austco Healthcare and Regal Funds Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.