Correlation Between Regal Investment and Hansen Technologies

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

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

Diversification Opportunities for Regal Investment and Hansen Technologies

0.76

Correlation Coefficient

Regal Investment  Hansen Technologies

Poor diversification

The 3 months correlation between Regal and Hansen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and Hansen Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansen Technologies 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 Hansen Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansen Technologies has no effect on the direction of Regal Investment i.e., Regal Investment and Hansen Technologies go up and down completely randomly.

Pair Corralation between Regal Investment and Hansen Technologies

Assuming the 90 days trading horizon Regal Investment is expected to generate 5.35 times less return on investment than Hansen Technologies. But when comparing it to its historical volatility, Regal Investment is 1.18 times less risky than Hansen Technologies. It trades about 0.07 of its potential returns per unit of risk. Hansen Technologies is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest  426.00  in Hansen Technologies on September 2, 2024 and sell it today you would earn a total of  155.00  from holding Hansen Technologies or generate 36.38% return on investment over 90 days.

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

Regal Investment  vs.  Hansen Technologies

Regal Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

Hansen Technologies

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hansen Technologies are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Hansen Technologies unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regal Investment and Hansen Technologies

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

The idea behind Regal Investment and Hansen Technologies 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.