Correlation Between Regents Park and FlexShares Core

Can any of the company-specific risk be diversified away by investing in both Regents Park and FlexShares Core 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 Regents Park and FlexShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Regents Park Funds and FlexShares Core Select, you can compare the effects of market volatilities on Regents Park and FlexShares Core 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 Regents Park with a short position of FlexShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regents Park and FlexShares Core.

Diversification Opportunities for Regents Park and FlexShares Core

-0.7

Correlation Coefficient

Regents Park  FlexShares Core

Excellent diversification

The 3 months correlation between Regents and FlexShares is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Regents Park Funds and FlexShares Core Select in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FlexShares Core Select and Regents Park 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 Regents Park Funds are associated (or correlated) with FlexShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FlexShares Core Select has no effect on the direction of Regents Park i.e., Regents Park and FlexShares Core go up and down completely randomly.

Pair Corralation between Regents Park and FlexShares Core

If you would invest  870.00  in Regents Park Funds on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Regents Park Funds or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Regents Park Funds  vs.  FlexShares Core Select

Regents Park Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

FlexShares Core Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FlexShares Core Select has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, FlexShares Core is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Regents Park and FlexShares Core

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

The idea behind Regents Park Funds and FlexShares Core Select 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.

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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.