Correlation Between Regal Funds and Event Hospitality

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

Diversification Opportunities for Regal Funds and Event Hospitality

0.81
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Regal and Event is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Event Hospitality and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Event Hospitality 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 Event Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Event Hospitality has no effect on the direction of Regal Funds i.e., Regal Funds and Event Hospitality go up and down completely randomly.

Pair Corralation between Regal Funds and Event Hospitality

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 1.23 times more return on investment than Event Hospitality. However, Regal Funds is 1.23 times more volatile than Event Hospitality and. It trades about 0.17 of its potential returns per unit of risk. Event Hospitality and is currently generating about 0.15 per unit of risk. If you would invest  322.00  in Regal Funds Management on September 6, 2024 and sell it today you would earn a total of  74.00  from holding Regal Funds Management or generate 22.98% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Regal Funds Management  vs.  Event Hospitality and

 Performance 
       Timeline  
Regal Funds Management 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak essential indicators, Regal Funds unveiled solid returns over the last few months and may actually be approaching a breakup point.
Event Hospitality 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Event Hospitality and are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Event Hospitality unveiled solid returns over the last few months and may actually be approaching a breakup point.

Regal Funds and Event Hospitality Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Regal Funds and Event Hospitality

The main advantage of trading using opposite Regal Funds and Event Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Event Hospitality 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 Event Hospitality will offset losses from the drop in Event Hospitality's long position.
The idea behind Regal Funds Management and Event Hospitality and 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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