Correlation Between Regal Funds and Hub24

Can any of the company-specific risk be diversified away by investing in both Regal Funds and Hub24 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 Hub24 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 Hub24, you can compare the effects of market volatilities on Regal Funds and Hub24 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 Hub24. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and Hub24.

Diversification Opportunities for Regal Funds and Hub24

0.54

Correlation Coefficient

Regal Funds  Hub24

Very weak diversification

The 3 months correlation between Regal and Hub24 is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Hub24 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub24 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 Hub24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub24 has no effect on the direction of Regal Funds i.e., Regal Funds and Hub24 go up and down completely randomly.

Pair Corralation between Regal Funds and Hub24

Assuming the 90 days trading horizon Regal Funds Management is expected to under-perform the Hub24. In addition to that, Regal Funds is 1.45 times more volatile than Hub24. It trades about -0.01 of its total potential returns per unit of risk. Hub24 is currently generating about 0.1 per unit of volatility. If you would invest  7,019  in Hub24 on October 13, 2024 and sell it today you would earn a total of  216.00  from holding Hub24 or generate 3.08% return on investment over 90 days.

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

Regal Funds Management  vs.  Hub24

Regal Funds Management

Risk-Adjusted Performance

0 of 100

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 comparatively stable essential indicators, Regal Funds is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Hub24

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hub24 are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, Hub24 unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regal Funds and Hub24

The main advantage of trading using opposite Regal Funds and Hub24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, Hub24 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 Hub24 will offset losses from the drop in Hub24's long position.

The idea behind Regal Funds Management and Hub24 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.