Correlation Between Robex Resources and B2Gold Corp

Can any of the company-specific risk be diversified away by investing in both Robex Resources and B2Gold Corp 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 Robex Resources and B2Gold Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Robex Resources and B2Gold Corp, you can compare the effects of market volatilities on Robex Resources and B2Gold Corp 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 Robex Resources with a short position of B2Gold Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robex Resources and B2Gold Corp.

Diversification Opportunities for Robex Resources and B2Gold Corp

0.64

Correlation Coefficient

Robex Resources  B2Gold Corp

Poor diversification

The 3 months correlation between Robex and B2Gold is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Robex Resources and B2Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on B2Gold Corp and Robex 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 Robex Resources are associated (or correlated) with B2Gold Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of B2Gold Corp has no effect on the direction of Robex Resources i.e., Robex Resources and B2Gold Corp go up and down completely randomly.

Pair Corralation between Robex Resources and B2Gold Corp

Assuming the 90 days horizon Robex Resources is expected to under-perform the B2Gold Corp. In addition to that, Robex Resources is 1.25 times more volatile than B2Gold Corp. It trades about -0.16 of its total potential returns per unit of risk. B2Gold Corp is currently generating about 0.03 per unit of volatility. If you would invest  268.00  in B2Gold Corp on September 14, 2024 and sell it today you would earn a total of  2.00  from holding B2Gold Corp or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Robex Resources  vs.  B2Gold Corp

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 fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

B2Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days B2Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Robex Resources and B2Gold Corp

The main advantage of trading using opposite Robex Resources and B2Gold Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robex Resources position performs unexpectedly, B2Gold Corp 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 B2Gold Corp will offset losses from the drop in B2Gold Corp's long position.

The idea behind Robex Resources and B2Gold Corp 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.