Correlation Between Regal Funds and OD6 Metals

Can any of the company-specific risk be diversified away by investing in both Regal Funds and OD6 Metals 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 OD6 Metals 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 OD6 Metals, you can compare the effects of market volatilities on Regal Funds and OD6 Metals 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 OD6 Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regal Funds and OD6 Metals.

Diversification Opportunities for Regal Funds and OD6 Metals

0.69

Correlation Coefficient

Regal Funds  OD6 Metals

Poor diversification

The 3 months correlation between Regal and OD6 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and OD6 Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OD6 Metals 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 OD6 Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OD6 Metals has no effect on the direction of Regal Funds i.e., Regal Funds and OD6 Metals go up and down completely randomly.

Pair Corralation between Regal Funds and OD6 Metals

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.79 times more return on investment than OD6 Metals. However, Regal Funds Management is 1.27 times less risky than OD6 Metals. It trades about -0.12 of its potential returns per unit of risk. OD6 Metals is currently generating about -0.11 per unit of risk. If you would invest  352.00  in Regal Funds Management on December 28, 2024 and sell it today you would lose (115.00) from holding Regal Funds Management or give up 32.67% 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.  OD6 Metals

Regal Funds Management

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

OD6 Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days OD6 Metals 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 April 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 OD6 Metals

The main advantage of trading using opposite Regal Funds and OD6 Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regal Funds position performs unexpectedly, OD6 Metals 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 OD6 Metals will offset losses from the drop in OD6 Metals' long position.

The idea behind Regal Funds Management and OD6 Metals 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.