Correlation Between Regal Funds and Liontown Resources

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

Diversification Opportunities for Regal Funds and Liontown Resources

0.37

Correlation Coefficient

Regal Funds  Liontown Resources

Weak diversification

The 3 months correlation between Regal and Liontown is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Liontown Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontown Resources 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 Liontown Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontown Resources has no effect on the direction of Regal Funds i.e., Regal Funds and Liontown Resources go up and down completely randomly.

Pair Corralation between Regal Funds and Liontown Resources

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.53 times more return on investment than Liontown Resources. However, Regal Funds Management is 1.87 times less risky than Liontown Resources. It trades about -0.1 of its potential returns per unit of risk. Liontown Resources is currently generating about -0.09 per unit of risk. If you would invest  408.00  in Regal Funds Management on October 26, 2024 and sell it today you would lose (39.00) from holding Regal Funds Management or give up 9.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Regal Funds Management  vs.  Liontown Resources

Regal Funds Management

Risk-Adjusted Performance

0 of 100

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.

Liontown Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liontown Resources 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 basic 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 Liontown Resources

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

The idea behind Regal Funds Management and Liontown Resources 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.