Correlation Between Cache Exploration and Regis Resources

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

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

Diversification Opportunities for Cache Exploration and Regis Resources

0.0

Correlation Coefficient

Cache Exploration  Regis Resources

Pay attention - limited upside

The 3 months correlation between Cache and Regis is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cache Exploration and Regis Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Resources and Cache 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 Cache Exploration are associated (or correlated) with Regis Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Resources has no effect on the direction of Cache Exploration i.e., Cache Exploration and Regis Resources go up and down completely randomly.

Pair Corralation between Cache Exploration and Regis Resources

If you would invest  155.00  in Regis Resources on October 7, 2024 and sell it today you would lose (5.00) from holding Regis Resources or give up 3.23% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cache Exploration  vs.  Regis Resources

Cache Exploration

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cache Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Cache Exploration is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Regis Resources

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regis Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Regis Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cache Exploration and Regis Resources

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

The idea behind Cache Exploration and Regis 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.