Correlation Between Regis Resources and Irving Resources

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

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

Diversification Opportunities for Regis Resources and Irving Resources

0.25

Correlation Coefficient

Regis Resources  Irving Resources

Modest diversification

The 3 months correlation between Regis and Irving is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Regis Resources and Irving Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Irving Resources 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 Irving Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Irving Resources has no effect on the direction of Regis Resources i.e., Regis Resources and Irving Resources go up and down completely randomly.

Pair Corralation between Regis Resources and Irving Resources

Assuming the 90 days horizon Regis Resources is expected to generate 0.86 times more return on investment than Irving Resources. However, Regis Resources is 1.16 times less risky than Irving Resources. It trades about 0.14 of its potential returns per unit of risk. Irving Resources is currently generating about 0.05 per unit of risk. If you would invest  154.00  in Regis Resources on December 29, 2024 and sell it today you would earn a total of  77.00  from holding Regis Resources or generate 50.0% return on investment over 90 days.

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

Regis Resources  vs.  Irving Resources

Regis Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Regis Resources are ranked lower than 11 (%) 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.

Irving Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Irving Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Irving Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Regis Resources and Irving Resources

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

The idea behind Regis Resources and Irving 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.