Correlation Between Regal Funds and Lindian Resources

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

Diversification Opportunities for Regal Funds and Lindian Resources

-0.49

Correlation Coefficient

Regal Funds  Lindian Resources

Very good diversification

The 3 months correlation between Regal and Lindian is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Lindian Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lindian 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 Lindian Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lindian Resources has no effect on the direction of Regal Funds i.e., Regal Funds and Lindian Resources go up and down completely randomly.

Pair Corralation between Regal Funds and Lindian Resources

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.35 times more return on investment than Lindian Resources. However, Regal Funds Management is 2.87 times less risky than Lindian Resources. It trades about 0.15 of its potential returns per unit of risk. Lindian Resources is currently generating about -0.05 per unit of risk. If you would invest  334.00  in Regal Funds Management on September 3, 2024 and sell it today you would earn a total of  69.00  from holding Regal Funds Management or generate 20.66% 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.  Lindian Resources

Regal Funds Management

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 11 (%) 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.

Lindian Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lindian Resources 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 January 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 Lindian Resources

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

The idea behind Regal Funds Management and Lindian Resources 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.