Correlation Between Regal Funds and Aurelia Metals

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

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

Diversification Opportunities for Regal Funds and Aurelia Metals

-0.64

Correlation Coefficient

Regal Funds  Aurelia Metals

Excellent diversification

The 3 months correlation between Regal and Aurelia is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Aurelia Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aurelia Metals and Regal Funds 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 Funds Management are associated (or correlated) with Aurelia Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aurelia Metals has no effect on the direction of Regal Funds i.e., Regal Funds and Aurelia Metals go up and down completely randomly.

Pair Corralation between Regal Funds and Aurelia Metals

Assuming the 90 days trading horizon Regal Funds Management is expected to under-perform the Aurelia Metals. In addition to that, Regal Funds is 1.04 times more volatile than Aurelia Metals. It trades about -0.12 of its total potential returns per unit of risk. Aurelia Metals is currently generating about 0.16 per unit of volatility. If you would invest  18.00  in Aurelia Metals on December 30, 2024 and sell it today you would earn a total of  8.00  from holding Aurelia Metals or generate 44.44% return on investment over 90 days.

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

Regal Funds Management  vs.  Aurelia Metals

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.

Aurelia Metals

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Aurelia Metals are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain forward indicators, Aurelia Metals unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regal Funds and Aurelia Metals

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

The idea behind Regal Funds Management and Aurelia Metals 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.