Correlation Between Regulus Resources and Tinka Resources

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

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

Diversification Opportunities for Regulus Resources and Tinka Resources

0.38

Correlation Coefficient

Regulus Resources  Tinka Resources

Weak diversification

The 3 months correlation between Regulus and Tinka is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Regulus Resources and Tinka Resources Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinka Resources and Regulus Resources 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 Regulus Resources are associated (or correlated) with Tinka Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinka Resources has no effect on the direction of Regulus Resources i.e., Regulus Resources and Tinka Resources go up and down completely randomly.

Pair Corralation between Regulus Resources and Tinka Resources

Assuming the 90 days horizon Regulus Resources is expected to generate 0.55 times more return on investment than Tinka Resources. However, Regulus Resources is 1.82 times less risky than Tinka Resources. It trades about 0.01 of its potential returns per unit of risk. Tinka Resources Limited is currently generating about -0.02 per unit of risk. If you would invest  200.00  in Regulus Resources on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Regulus Resources or generate 0.0% return on investment over 90 days.

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

Regulus Resources  vs.  Tinka Resources Limited

Regulus Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Regulus Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Regulus Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Tinka Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tinka Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Tinka Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Regulus Resources and Tinka Resources

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

The idea behind Regulus Resources and Tinka Resources Limited 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.