Correlation Between Regal Funds and Sims

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

Diversification Opportunities for Regal Funds and Sims

0.51

Correlation Coefficient

Regal Funds  Sims

Very weak diversification

The 3 months correlation between Regal and Sims is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Sims in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sims 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 Sims. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sims has no effect on the direction of Regal Funds i.e., Regal Funds and Sims go up and down completely randomly.

Pair Corralation between Regal Funds and Sims

Assuming the 90 days trading horizon Regal Funds Management is expected to under-perform the Sims. In addition to that, Regal Funds is 1.15 times more volatile than Sims. It trades about -0.38 of its total potential returns per unit of risk. Sims is currently generating about -0.22 per unit of volatility. If you would invest  1,269  in Sims on September 24, 2024 and sell it today you would lose (102.00) from holding Sims or give up 8.04% of portfolio value over 90 days.

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

Regal Funds Management  vs.  Sims

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.

Sims

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sims has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Sims 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 Sims

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

The idea behind Regal Funds Management and Sims 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.