Correlation Between Regal Funds and Neurotech International

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

Diversification Opportunities for Regal Funds and Neurotech International

0.65

Correlation Coefficient

Regal Funds  Neurotech International

Poor diversification

The 3 months correlation between Regal and Neurotech is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Neurotech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neurotech International 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 Neurotech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neurotech International has no effect on the direction of Regal Funds i.e., Regal Funds and Neurotech International go up and down completely randomly.

Pair Corralation between Regal Funds and Neurotech International

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.68 times more return on investment than Neurotech International. However, Regal Funds Management is 1.47 times less risky than Neurotech International. It trades about -0.01 of its potential returns per unit of risk. Neurotech International is currently generating about -0.02 per unit of risk. If you would invest  394.00  in Regal Funds Management on October 21, 2024 and sell it today you would lose (14.00) from holding Regal Funds Management or give up 3.55% of portfolio value over 90 days.

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

Regal Funds Management  vs.  Neurotech International

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.

Neurotech International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Neurotech International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Neurotech International is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Regal Funds and Neurotech International

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

The idea behind Regal Funds Management and Neurotech International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.