Correlation Between Brunswick Exploration and Robex Resources

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

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

Diversification Opportunities for Brunswick Exploration and Robex Resources

-0.41

Correlation Coefficient

Brunswick Exploration  Robex Resources

Very good diversification

The 3 months correlation between Brunswick and Robex is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick Exploration and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and Brunswick Exploration 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 Brunswick Exploration are associated (or correlated) with Robex Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robex Resources has no effect on the direction of Brunswick Exploration i.e., Brunswick Exploration and Robex Resources go up and down completely randomly.

Pair Corralation between Brunswick Exploration and Robex Resources

Assuming the 90 days horizon Brunswick Exploration is expected to under-perform the Robex Resources. In addition to that, Brunswick Exploration is 2.06 times more volatile than Robex Resources. It trades about -0.06 of its total potential returns per unit of risk. Robex Resources is currently generating about 0.13 per unit of volatility. If you would invest  149.00  in Robex Resources on December 3, 2024 and sell it today you would earn a total of  38.00  from holding Robex Resources or generate 25.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.77%
Values	Daily Returns

Brunswick Exploration  vs.  Robex Resources

Brunswick Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brunswick Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Robex Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Robex Resources are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Robex Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Brunswick Exploration and Robex Resources

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

The idea behind Brunswick Exploration and Robex Resources 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.