Correlation Between Princeton Capital and Regency Affiliates

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

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

Diversification Opportunities for Princeton Capital and Regency Affiliates

0.44

Correlation Coefficient

Princeton Capital  Regency Affiliates

Very weak diversification

The 3 months correlation between Princeton and Regency is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Princeton Capital and Regency Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regency Affiliates and Princeton Capital 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 Princeton Capital are associated (or correlated) with Regency Affiliates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regency Affiliates has no effect on the direction of Princeton Capital i.e., Princeton Capital and Regency Affiliates go up and down completely randomly.

Pair Corralation between Princeton Capital and Regency Affiliates

Given the investment horizon of 90 days Princeton Capital is expected to under-perform the Regency Affiliates. In addition to that, Princeton Capital is 1.41 times more volatile than Regency Affiliates. It trades about -0.19 of its total potential returns per unit of risk. Regency Affiliates is currently generating about 0.02 per unit of volatility. If you would invest  360.00  in Regency Affiliates on May 1, 2025 and sell it today you would earn a total of  0.00  from holding Regency Affiliates or generate 0.0% return on investment over 90 days.

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

Princeton Capital  vs.  Regency Affiliates

Princeton Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Princeton Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Regency Affiliates

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Regency Affiliates are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical and fundamental indicators, Regency Affiliates is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Princeton Capital and Regency Affiliates

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

The idea behind Princeton Capital and Regency Affiliates 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.