Correlation Between Johcm Global and Regnan Uk

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

By analyzing existing cross correlation between Johcm Global Equity and Regnan Uk Umbrella, you can compare the effects of market volatilities on Johcm Global and Regnan Uk 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 Johcm Global with a short position of Regnan Uk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Johcm Global and Regnan Uk.

Diversification Opportunities for Johcm Global and Regnan Uk

0.59

Correlation Coefficient

Johcm Global  Regnan Uk

Very weak diversification

The 3 months correlation between Johcm and Regnan is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Johcm Global Equity and Regnan Uk Umbrella in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regnan Uk Umbrella and Johcm Global 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 Johcm Global Equity are associated (or correlated) with Regnan Uk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regnan Uk Umbrella has no effect on the direction of Johcm Global i.e., Johcm Global and Regnan Uk go up and down completely randomly.

Pair Corralation between Johcm Global and Regnan Uk

Assuming the 90 days horizon Johcm Global Equity is expected to under-perform the Regnan Uk. In addition to that, Johcm Global is 53.75 times more volatile than Regnan Uk Umbrella. It trades about -0.08 of its total potential returns per unit of risk. Regnan Uk Umbrella is currently generating about 0.21 per unit of volatility. If you would invest  651.00  in Regnan Uk Umbrella on December 29, 2024 and sell it today you would earn a total of  1.00  from holding Regnan Uk Umbrella or generate 0.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	37.7%
Values	Daily Returns

Johcm Global Equity  vs.  Regnan Uk Umbrella

Johcm Global Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Johcm Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Regnan Uk Umbrella

Risk-Adjusted Performance

Solid

Over the last 90 days Regnan Uk Umbrella has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Regnan Uk is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Johcm Global and Regnan Uk

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

The idea behind Johcm Global Equity and Regnan Uk Umbrella 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.