Correlation Between Robex Resources and Dacian Gold

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

By analyzing existing cross correlation between Robex Resources and Dacian Gold Limited, you can compare the effects of market volatilities on Robex Resources and Dacian Gold 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 Dacian Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robex Resources and Dacian Gold.

Diversification Opportunities for Robex Resources and Dacian Gold

0.19

Correlation Coefficient

Robex Resources  Dacian Gold

Average diversification

The 3 months correlation between Robex and Dacian is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Robex Resources and Dacian Gold Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dacian Gold Limited 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 Dacian Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dacian Gold Limited has no effect on the direction of Robex Resources i.e., Robex Resources and Dacian Gold go up and down completely randomly.

Pair Corralation between Robex Resources and Dacian Gold

Assuming the 90 days horizon Robex Resources is expected to generate 82.12 times more return on investment than Dacian Gold. However, Robex Resources is 82.12 times more volatile than Dacian Gold Limited. It trades about 0.24 of its potential returns per unit of risk. Dacian Gold Limited is currently generating about 0.06 per unit of risk. If you would invest  250.00  in Robex Resources on October 4, 2024 and sell it today you would lose (70.00) from holding Robex Resources or give up 28.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	37.22%
Values	Daily Returns

Robex Resources  vs.  Dacian Gold Limited

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 latest fragile performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Dacian Gold Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Dacian Gold Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Dacian Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Robex Resources and Dacian Gold

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

The idea behind Robex Resources and Dacian Gold 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.