Correlation Between Regents Park and ProShares Hedge

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

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

Diversification Opportunities for Regents Park and ProShares Hedge

0.24

Correlation Coefficient

Regents Park  ProShares Hedge

Modest diversification

The 3 months correlation between Regents and ProShares is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Regents Park Funds and ProShares Hedge Replication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Hedge Repl and Regents Park 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 Regents Park Funds are associated (or correlated) with ProShares Hedge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Hedge Repl has no effect on the direction of Regents Park i.e., Regents Park and ProShares Hedge go up and down completely randomly.

Pair Corralation between Regents Park and ProShares Hedge

If you would invest  4,940  in ProShares Hedge Replication on June 16, 2024 and sell it today you would earn a total of  34.00  from holding ProShares Hedge Replication or generate 0.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Regents Park Funds  vs.  ProShares Hedge Replication

Regents Park Funds

Risk-Adjusted Performance

0 of 100

Very Weak

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

ProShares Hedge Repl

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ProShares Hedge Replication are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, ProShares Hedge is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Regents Park and ProShares Hedge

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

The idea behind Regents Park Funds and ProShares Hedge Replication 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.