Correlation Between Macquarie Technology and Regal Funds

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

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

Diversification Opportunities for Macquarie Technology and Regal Funds

0.83

Correlation Coefficient

Macquarie Technology  Regal Funds

Very poor diversification

The 3 months correlation between Macquarie and Regal is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Macquarie Technology Group 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 Macquarie Technology 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 Macquarie Technology Group 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 Macquarie Technology i.e., Macquarie Technology and Regal Funds go up and down completely randomly.

Pair Corralation between Macquarie Technology and Regal Funds

Assuming the 90 days trading horizon Macquarie Technology Group is expected to generate 0.36 times more return on investment than Regal Funds. However, Macquarie Technology Group is 2.79 times less risky than Regal Funds. It trades about -0.31 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  8,869  in Macquarie Technology Group on December 30, 2024 and sell it today you would lose (2,416) from holding Macquarie Technology Group or give up 27.24% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Macquarie Technology Group  vs.  Regal Funds Management

Macquarie Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Macquarie Technology Group 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 basic 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.

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 Macquarie Technology and Regal Funds

The main advantage of trading using opposite Macquarie Technology and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Macquarie Technology 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 Macquarie Technology Group 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 Transaction History module to view history of all your transactions and understand their impact on performance.