Correlation Between Dacian Gold and Robex Resources

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

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

Diversification Opportunities for Dacian Gold and Robex Resources

0.19

Correlation Coefficient

Dacian Gold  Robex Resources

Average diversification

The 3 months correlation between Dacian and Robex is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Dacian Gold Limited and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and Dacian Gold 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 Dacian Gold Limited 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 Dacian Gold i.e., Dacian Gold and Robex Resources go up and down completely randomly.

Pair Corralation between Dacian Gold and Robex Resources

Assuming the 90 days horizon Dacian Gold is expected to generate 311.35 times less return on investment than Robex Resources. But when comparing it to its historical volatility, Dacian Gold Limited is 82.12 times less risky than Robex Resources. It trades about 0.06 of its potential returns per unit of risk. Robex Resources is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  250.00  in Robex Resources on October 4, 2024 and sell it today you would lose (70.00) from holding Robex Resources or give up 28.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	37.22%
Values	Daily Returns

Dacian Gold Limited  vs.  Robex Resources

Dacian Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

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

Robex Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Robex Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Dacian Gold and Robex Resources

The main advantage of trading using opposite Dacian Gold and Robex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dacian Gold 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 Dacian Gold Limited 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.