Correlation Between Regal Funds and Viva Leisure

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

Diversification Opportunities for Regal Funds and Viva Leisure

0.09

Correlation Coefficient

Regal Funds  Viva Leisure

Significant diversification

The 3 months correlation between Regal and Viva is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Viva Leisure in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Leisure 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 Viva Leisure. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Leisure has no effect on the direction of Regal Funds i.e., Regal Funds and Viva Leisure go up and down completely randomly.

Pair Corralation between Regal Funds and Viva Leisure

Assuming the 90 days trading horizon Regal Funds Management is expected to generate 0.8 times more return on investment than Viva Leisure. However, Regal Funds Management is 1.24 times less risky than Viva Leisure. It trades about 0.11 of its potential returns per unit of risk. Viva Leisure is currently generating about 0.03 per unit of risk. 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 Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Regal Funds Management  vs.  Viva Leisure

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.

Viva Leisure

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Viva Leisure are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Viva Leisure 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 Viva Leisure

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

The idea behind Regal Funds Management and Viva Leisure 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.