Correlation Between Regal Funds and Clime Investment

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

Diversification Opportunities for Regal Funds and Clime Investment

0.53

Correlation Coefficient

Regal Funds  Clime Investment

Very weak diversification

The 3 months correlation between Regal and Clime is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Clime Investment Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clime Investment Man 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 Clime Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clime Investment Man has no effect on the direction of Regal Funds i.e., Regal Funds and Clime Investment go up and down completely randomly.

Pair Corralation between Regal Funds and Clime Investment

Assuming the 90 days trading horizon Regal Funds Management is expected to under-perform the Clime Investment. In addition to that, Regal Funds is 2.05 times more volatile than Clime Investment Management. It trades about -0.12 of its total potential returns per unit of risk. Clime Investment Management is currently generating about -0.03 per unit of volatility. If you would invest  36.00  in Clime Investment Management on December 29, 2024 and sell it today you would lose (2.00) from holding Clime Investment Management or give up 5.56% of portfolio value over 90 days.

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

Regal Funds Management  vs.  Clime Investment Management

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.

Clime Investment Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clime Investment Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Clime Investment is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Regal Funds and Clime Investment

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

The idea behind Regal Funds Management and Clime Investment Management 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.