Correlation Between Regal Funds and Event Hospitality
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 Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Regal Funds Management vs. Event Hospitality and
Performance |
Timeline |
Regal Funds Management |
Event Hospitality |
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.Regal Funds vs. Westpac Banking | Regal Funds vs. Ecofibre | Regal Funds vs. Adriatic Metals Plc | Regal Funds vs. Australian Dairy Farms |
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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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