Correlation Between Sims and Regal Funds

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

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

Diversification Opportunities for Sims and Regal Funds

0.49

Correlation Coefficient

Sims  Regal Funds

Very weak diversification

The 3 months correlation between Sims and Regal is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Sims 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 Sims 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 Sims 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 Sims i.e., Sims and Regal Funds go up and down completely randomly.

Pair Corralation between Sims and Regal Funds

Assuming the 90 days trading horizon Sims is expected to under-perform the Regal Funds. But the stock apears to be less risky and, when comparing its historical volatility, Sims is 1.26 times less risky than Regal Funds. The stock trades about -0.02 of its potential returns per unit of risk. The Regal Funds Management is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  360.00  in Regal Funds Management on September 26, 2024 and sell it today you would lose (3.00) from holding Regal Funds Management or give up 0.83% of portfolio value over 90 days.

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

Sims  vs.  Regal Funds Management

Sims

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sims has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable primary indicators, Sims is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Sims and Regal Funds

The main advantage of trading using opposite Sims and Regal Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sims 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 Sims 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.