Correlation Between Iodm and Regal Funds

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

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

Diversification Opportunities for Iodm and Regal Funds

-0.59

Correlation Coefficient

Iodm  Regal Funds

Excellent diversification

The 3 months correlation between Iodm and Regal is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Iodm 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 Iodm 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 Iodm 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 Iodm i.e., Iodm and Regal Funds go up and down completely randomly.

Pair Corralation between Iodm and Regal Funds

Assuming the 90 days trading horizon Iodm is expected to generate 1.19 times more return on investment than Regal Funds. However, Iodm is 1.19 times more volatile than Regal Funds Management. It trades about 0.06 of its potential returns per unit of risk. Regal Funds Management is currently generating about -0.12 per unit of risk. If you would invest  16.00  in Iodm on December 29, 2024 and sell it today you would earn a total of  2.00  from holding Iodm or generate 12.5% return on investment over 90 days.

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

Iodm  vs.  Regal Funds Management

Iodm

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Iodm are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental indicators, Iodm unveiled solid returns over the last few months and may actually be approaching a breakup point.

Regal Funds Management

Risk-Adjusted Performance

Very 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 uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Iodm and Regal Funds

The main advantage of trading using opposite Iodm and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iodm 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 Iodm 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.