Correlation Between Regal Investment and Mineral Resources

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

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

Diversification Opportunities for Regal Investment and Mineral Resources

-0.19

Correlation Coefficient

Regal Investment  Mineral Resources

Good diversification

The 3 months correlation between Regal and Mineral is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Regal Investment and Mineral Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mineral Resources 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 Mineral Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mineral Resources has no effect on the direction of Regal Investment i.e., Regal Investment and Mineral Resources go up and down completely randomly.

Pair Corralation between Regal Investment and Mineral Resources

Assuming the 90 days trading horizon Regal Investment is expected to generate 48.3 times less return on investment than Mineral Resources. But when comparing it to its historical volatility, Regal Investment is 3.9 times less risky than Mineral Resources. It trades about 0.0 of its potential returns per unit of risk. Mineral Resources is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,419  in Mineral Resources on October 9, 2024 and sell it today you would earn a total of  48.00  from holding Mineral Resources or generate 1.4% return on investment over 90 days.

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

Regal Investment  vs.  Mineral Resources

Regal Investment

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Investment are ranked lower than 2 (%) 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.

Mineral Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mineral Resources 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 February 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 Mineral Resources

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

The idea behind Regal Investment and Mineral Resources 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.