Correlation Between Centuria Industrial and Regal Funds

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

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

Diversification Opportunities for Centuria Industrial and Regal Funds

-0.7

Correlation Coefficient

Centuria Industrial  Regal Funds

Excellent diversification

The 3 months correlation between Centuria and Regal is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit 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 Centuria Industrial 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 Centuria Industrial Reit 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 Centuria Industrial i.e., Centuria Industrial and Regal Funds go up and down completely randomly.

Pair Corralation between Centuria Industrial and Regal Funds

Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Regal Funds. But the stock apears to be less risky and, when comparing its historical volatility, Centuria Industrial Reit is 2.63 times less risky than Regal Funds. The stock trades about -0.23 of its potential returns per unit of risk. The Regal Funds Management is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  330.00  in Regal Funds Management on September 15, 2024 and sell it today you would earn a total of  51.00  from holding Regal Funds Management or generate 15.45% return on investment over 90 days.

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

Centuria Industrial Reit  vs.  Regal Funds Management

Centuria Industrial Reit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centuria Industrial Reit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Regal Funds Management

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 9 (%) 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 Centuria Industrial and Regal Funds

The main advantage of trading using opposite Centuria Industrial and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial 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 Centuria Industrial Reit 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 Transaction History module to view history of all your transactions and understand their impact on performance.