Correlation Between Robex Resources and K92 Mining

Can any of the company-specific risk be diversified away by investing in both Robex Resources and K92 Mining 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 K92 Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Robex Resources and K92 Mining, you can compare the effects of market volatilities on Robex Resources and K92 Mining 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 K92 Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robex Resources and K92 Mining.

Diversification Opportunities for Robex Resources and K92 Mining

-0.38

Correlation Coefficient

Robex Resources  K92 Mining

Very good diversification

The 3 months correlation between Robex and K92 is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Robex Resources and K92 Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K92 Mining 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 K92 Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K92 Mining has no effect on the direction of Robex Resources i.e., Robex Resources and K92 Mining go up and down completely randomly.

Pair Corralation between Robex Resources and K92 Mining

Assuming the 90 days horizon Robex Resources is expected to under-perform the K92 Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Robex Resources is 1.12 times less risky than K92 Mining. The pink sheet trades about -0.25 of its potential returns per unit of risk. The K92 Mining is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  677.00  in K92 Mining on September 2, 2024 and sell it today you would lose (34.00) from holding K92 Mining or give up 5.02% of portfolio value over 90 days.

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

Robex Resources  vs.  K92 Mining

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.

K92 Mining

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in K92 Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, K92 Mining reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robex Resources and K92 Mining

The main advantage of trading using opposite Robex Resources and K92 Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robex Resources position performs unexpectedly, K92 Mining 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 K92 Mining will offset losses from the drop in K92 Mining's long position.

The idea behind Robex Resources and K92 Mining 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.