Correlation Between Sandon Capital and Regal Funds

Can any of the company-specific risk be diversified away by investing in both Sandon Capital and Regal Funds 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 Sandon Capital and Regal Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sandon Capital Investments and Regal Funds Management, you can compare the effects of market volatilities on Sandon Capital and Regal Funds 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 Sandon Capital with a short position of Regal Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandon Capital and Regal Funds.

Diversification Opportunities for Sandon Capital and Regal Funds

0.33

Correlation Coefficient

Sandon Capital  Regal Funds

Weak diversification

The 3 months correlation between Sandon and Regal is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sandon Capital Investments and Regal Funds Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regal Funds Management and Sandon Capital 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 Sandon Capital Investments are associated (or correlated) with Regal Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regal Funds Management has no effect on the direction of Sandon Capital i.e., Sandon Capital and Regal Funds go up and down completely randomly.

Pair Corralation between Sandon Capital and Regal Funds

Assuming the 90 days trading horizon Sandon Capital Investments is expected to generate 0.73 times more return on investment than Regal Funds. However, Sandon Capital Investments is 1.38 times less risky than Regal Funds. It trades about 0.08 of its potential returns per unit of risk. Regal Funds Management is currently generating about 0.04 per unit of risk. If you would invest  78.00  in Sandon Capital Investments on September 14, 2024 and sell it today you would earn a total of  2.00  from holding Sandon Capital Investments or generate 2.56% return on investment over 90 days.

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

Sandon Capital Investments  vs.  Regal Funds Management

Sandon Capital Inves

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sandon Capital Investments are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Sandon Capital is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Regal Funds Management

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Regal Funds unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sandon Capital and Regal Funds

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

The idea behind Sandon Capital Investments and Regal Funds Management 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.