Correlation Between Robex Resources and Goldshore Resources

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

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

Diversification Opportunities for Robex Resources and Goldshore Resources

0.69

Correlation Coefficient

Robex Resources  Goldshore Resources

Poor diversification

The 3 months correlation between Robex and Goldshore is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Robex Resources and Goldshore Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldshore Resources 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 Goldshore Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldshore Resources has no effect on the direction of Robex Resources i.e., Robex Resources and Goldshore Resources go up and down completely randomly.

Pair Corralation between Robex Resources and Goldshore Resources

Assuming the 90 days horizon Robex Resources is expected to under-perform the Goldshore Resources. But the pink sheet apears to be less risky and, when comparing its historical volatility, Robex Resources is 2.49 times less risky than Goldshore Resources. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Goldshore Resources is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Goldshore Resources on September 1, 2024 and sell it today you would lose (4.00) from holding Goldshore Resources or give up 18.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Robex Resources  vs.  Goldshore Resources

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 December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Goldshore Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Goldshore Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Robex Resources and Goldshore Resources

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

The idea behind Robex Resources and Goldshore 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..