Correlation Between Regal Funds and Boss Energy

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

Diversification Opportunities for Regal Funds and Boss Energy

-0.05

Correlation Coefficient

Regal Funds  Boss Energy

Good diversification

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

Pair Corralation between Regal Funds and Boss Energy

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.65 times more return on investment than Boss Energy. However, Regal Funds Management is 1.53 times less risky than Boss Energy. It trades about 0.1 of its potential returns per unit of risk. Boss Energy Limited is currently generating about -0.03 per unit of risk. If you would invest  330.00  in Regal Funds Management on September 14, 2024 and sell it today you would earn a total of  45.00  from holding Regal Funds Management or generate 13.64% return on investment over 90 days.

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

Regal Funds Management  vs.  Boss Energy Limited

Regal Funds Management

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Regal Funds unveiled solid returns over the last few months and may actually be approaching a breakup point.

Boss Energy Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boss Energy Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Regal Funds and Boss Energy

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

The idea behind Regal Funds Management and Boss Energy Limited 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..