Correlation Between Regal Investment and FleetPartners

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

By analyzing existing cross correlation between Regal Investment and FleetPartners Group, you can compare the effects of market volatilities on Regal Investment and FleetPartners 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 FleetPartners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Investment and FleetPartners.

Diversification Opportunities for Regal Investment and FleetPartners

0.05

Correlation Coefficient

Regal Investment  FleetPartners

Significant diversification

The 3 months correlation between Regal and FleetPartners is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and FleetPartners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FleetPartners Group 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 FleetPartners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FleetPartners Group has no effect on the direction of Regal Investment i.e., Regal Investment and FleetPartners go up and down completely randomly.

Pair Corralation between Regal Investment and FleetPartners

Assuming the 90 days trading horizon Regal Investment is expected to generate 0.38 times more return on investment than FleetPartners. However, Regal Investment is 2.6 times less risky than FleetPartners. It trades about -0.02 of its potential returns per unit of risk. FleetPartners Group is currently generating about -0.17 per unit of risk. If you would invest  332.00  in Regal Investment on December 2, 2024 and sell it today you would lose (4.00) from holding Regal Investment or give up 1.2% of portfolio value over 90 days.

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

Regal Investment  vs.  FleetPartners Group

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 comparatively stable basic indicators, Regal Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

FleetPartners Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days FleetPartners 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.

Pair Trading with Regal Investment and FleetPartners

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

The idea behind Regal Investment and FleetPartners Group 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.