Correlation Between Regal Funds and ANZ Group

Can any of the company-specific risk be diversified away by investing in both Regal Funds and ANZ Group 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 ANZ Group 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 ANZ Group Holdings, you can compare the effects of market volatilities on Regal Funds and ANZ Group 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 ANZ Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and ANZ Group.

Diversification Opportunities for Regal Funds and ANZ Group

0.01

Correlation Coefficient

Regal Funds  ANZ Group

Significant diversification

The 3 months correlation between Regal and ANZ is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and ANZ Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ANZ Group Holdings 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 ANZ Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ANZ Group Holdings has no effect on the direction of Regal Funds i.e., Regal Funds and ANZ Group go up and down completely randomly.

Pair Corralation between Regal Funds and ANZ Group

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 10.63 times more return on investment than ANZ Group. However, Regal Funds is 10.63 times more volatile than ANZ Group Holdings. It trades about 0.23 of its potential returns per unit of risk. ANZ Group Holdings is currently generating about 0.11 per unit of risk. If you would invest  352.00  in Regal Funds Management on October 23, 2024 and sell it today you would earn a total of  33.00  from holding Regal Funds Management or generate 9.38% return on investment over 90 days.

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

Regal Funds Management  vs.  ANZ Group Holdings

Regal Funds Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Regal Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

ANZ Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ANZ Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ANZ Group is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Regal Funds and ANZ Group

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

The idea behind Regal Funds Management and ANZ Group Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.