Correlation Between Regal Funds and Odyssey Energy

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

Diversification Opportunities for Regal Funds and Odyssey Energy

-0.22

Correlation Coefficient

Regal Funds  Odyssey Energy

Very good diversification

The 3 months correlation between Regal and Odyssey is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Odyssey Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Energy 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 Odyssey Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Energy has no effect on the direction of Regal Funds i.e., Regal Funds and Odyssey Energy go up and down completely randomly.

Pair Corralation between Regal Funds and Odyssey Energy

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.38 times more return on investment than Odyssey Energy. However, Regal Funds Management is 2.6 times less risky than Odyssey Energy. It trades about 0.02 of its potential returns per unit of risk. Odyssey Energy is currently generating about 0.0 per unit of risk. If you would invest  334.00  in Regal Funds Management on September 26, 2024 and sell it today you would earn a total of  23.00  from holding Regal Funds Management or generate 6.89% return on investment over 90 days.

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

Regal Funds Management  vs.  Odyssey Energy

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.

Odyssey Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Odyssey Energy 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 Odyssey Energy

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

The idea behind Regal Funds Management and Odyssey Energy 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.