Correlation Between Regal Funds and Collins Foods

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

Diversification Opportunities for Regal Funds and Collins Foods

0.3

Correlation Coefficient

Regal Funds  Collins Foods

Weak diversification

The 3 months correlation between Regal and Collins is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Regal Funds i.e., Regal Funds and Collins Foods go up and down completely randomly.

Pair Corralation between Regal Funds and Collins Foods

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 1.25 times more return on investment than Collins Foods. However, Regal Funds is 1.25 times more volatile than Collins Foods. It trades about 0.02 of its potential returns per unit of risk. Collins Foods is currently generating about 0.01 per unit of risk. If you would invest  330.00  in Regal Funds Management on October 4, 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 Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Regal Funds Management  vs.  Collins Foods

Regal Funds Management

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Regal Funds may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Collins Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Collins Foods 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 technical and fundamental 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 Funds and Collins Foods

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

The idea behind Regal Funds Management and Collins Foods 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.