Correlation Between Regal Funds and Sandfire Resources

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

Diversification Opportunities for Regal Funds and Sandfire Resources

-0.57

Correlation Coefficient

Regal Funds  Sandfire Resources

Excellent diversification

The 3 months correlation between Regal and Sandfire is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Sandfire Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sandfire 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 Sandfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sandfire Resources has no effect on the direction of Regal Funds i.e., Regal Funds and Sandfire Resources go up and down completely randomly.

Pair Corralation between Regal Funds and Sandfire Resources

Assuming the 90 days trading horizon Regal Funds Management is expected to under-perform the Sandfire Resources. In addition to that, Regal Funds is 2.18 times more volatile than Sandfire Resources NL. It trades about -0.12 of its total potential returns per unit of risk. Sandfire Resources NL is currently generating about 0.12 per unit of volatility. If you would invest  939.00  in Sandfire Resources NL on December 30, 2024 and sell it today you would earn a total of  141.00  from holding Sandfire Resources NL or generate 15.02% return on investment over 90 days.

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

Regal Funds Management  vs.  Sandfire Resources NL

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.

Sandfire Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sandfire Resources NL are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sandfire Resources unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regal Funds and Sandfire Resources

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

The idea behind Regal Funds Management and Sandfire Resources NL 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.