Correlation Between Regis Resources and Gold Fields

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

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

Diversification Opportunities for Regis Resources and Gold Fields

0.23

Correlation Coefficient

Regis Resources  Gold Fields

Modest diversification

The 3 months correlation between Regis and Gold is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Regis Resources and Gold Fields Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Fields and Regis 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 Regis Resources are associated (or correlated) with Gold Fields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Fields has no effect on the direction of Regis Resources i.e., Regis Resources and Gold Fields go up and down completely randomly.

Pair Corralation between Regis Resources and Gold Fields

Assuming the 90 days horizon Regis Resources is expected to under-perform the Gold Fields. In addition to that, Regis Resources is 1.46 times more volatile than Gold Fields Ltd. It trades about -0.2 of its total potential returns per unit of risk. Gold Fields Ltd is currently generating about -0.09 per unit of volatility. If you would invest  1,439  in Gold Fields Ltd on October 9, 2024 and sell it today you would lose (55.00) from holding Gold Fields Ltd or give up 3.82% of portfolio value over 90 days.

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

Regis Resources  vs.  Gold Fields Ltd

Regis Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Regis Resources are ranked lower than 6 (%) 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.

Gold Fields

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gold Fields Ltd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical and fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Regis Resources and Gold Fields

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

The idea behind Regis Resources and Gold Fields Ltd 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.