Correlation Between Regal Investment and Carnegie Clean

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

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

Diversification Opportunities for Regal Investment and Carnegie Clean

0.3

Correlation Coefficient

Regal Investment  Carnegie Clean

Weak diversification

The 3 months correlation between Regal and Carnegie is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy and Regal Investment 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 Regal Investment are associated (or correlated) with Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Regal Investment i.e., Regal Investment and Carnegie Clean go up and down completely randomly.

Pair Corralation between Regal Investment and Carnegie Clean

Assuming the 90 days trading horizon Regal Investment is expected to under-perform the Carnegie Clean. But the stock apears to be less risky and, when comparing its historical volatility, Regal Investment is 2.88 times less risky than Carnegie Clean. The stock trades about -0.11 of its potential returns per unit of risk. The Carnegie Clean Energy is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  3.70  in Carnegie Clean Energy on December 25, 2024 and sell it today you would lose (0.20) from holding Carnegie Clean Energy or give up 5.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Regal Investment  vs.  Carnegie Clean Energy

Regal Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Regal Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Carnegie Clean Energy

Risk-Adjusted Performance

Weak

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

Pair Trading with Regal Investment and Carnegie Clean

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

The idea behind Regal Investment and Carnegie Clean Energy 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.