Correlation Between Green Technology and Regulus Resources

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

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

Diversification Opportunities for Green Technology and Regulus Resources

-0.12

Correlation Coefficient

Green Technology  Regulus Resources

Good diversification

The 3 months correlation between Green and Regulus is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Green Technology Metals and Regulus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Resources and Green Technology 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 Green Technology Metals are associated (or correlated) with Regulus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regulus Resources has no effect on the direction of Green Technology i.e., Green Technology and Regulus Resources go up and down completely randomly.

Pair Corralation between Green Technology and Regulus Resources

Assuming the 90 days horizon Green Technology Metals is expected to under-perform the Regulus Resources. In addition to that, Green Technology is 4.02 times more volatile than Regulus Resources. It trades about -0.05 of its total potential returns per unit of risk. Regulus Resources is currently generating about 0.11 per unit of volatility. If you would invest  133.00  in Regulus Resources on December 30, 2024 and sell it today you would earn a total of  22.00  from holding Regulus Resources or generate 16.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.38%
Values	Daily Returns

Green Technology Metals  vs.  Regulus Resources

Green Technology Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Green Technology Metals 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 essential 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.

Regulus Resources

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Regulus Resources are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Regulus Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Green Technology and Regulus Resources

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

The idea behind Green Technology Metals and Regulus 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.