Correlation Between Regal Funds and Wt Financial

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

Diversification Opportunities for Regal Funds and Wt Financial

0.23

Correlation Coefficient

Regal Funds  Wt Financial

Modest diversification

The 3 months correlation between Regal and WTL is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Regal Funds Management and Wt Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wt Financial Group 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 Wt Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wt Financial Group has no effect on the direction of Regal Funds i.e., Regal Funds and Wt Financial go up and down completely randomly.

Pair Corralation between Regal Funds and Wt Financial

Assuming the 90 days trading horizon Regal Funds is expected to generate 3.31 times less return on investment than Wt Financial. But when comparing it to its historical volatility, Regal Funds Management is 1.23 times less risky than Wt Financial. It trades about 0.02 of its potential returns per unit of risk. Wt Financial Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  9.00  in Wt Financial Group on September 29, 2024 and sell it today you would earn a total of  0.50  from holding Wt Financial Group or generate 5.56% return on investment over 90 days.

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

Regal Funds Management  vs.  Wt Financial Group

Regal Funds Management

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regal Funds Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Wt Financial Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Wt Financial Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, Wt Financial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Regal Funds and Wt Financial

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

The idea behind Regal Funds Management and Wt Financial Group 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.

Check out your portfolio center.

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 Stocks Directory module to find actively traded stocks across global markets.