Correlation Between Robex Resources and Leviathan Gold

Can any of the company-specific risk be diversified away by investing in both Robex Resources and Leviathan 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 Leviathan 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 Leviathan Gold, you can compare the effects of market volatilities on Robex Resources and Leviathan 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 Leviathan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robex Resources and Leviathan Gold.

Diversification Opportunities for Robex Resources and Leviathan Gold

0.32

Correlation Coefficient

Robex Resources  Leviathan Gold

Weak diversification

The 3 months correlation between Robex and Leviathan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Robex Resources and Leviathan Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leviathan Gold 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 Leviathan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leviathan Gold has no effect on the direction of Robex Resources i.e., Robex Resources and Leviathan Gold go up and down completely randomly.

Pair Corralation between Robex Resources and Leviathan Gold

Assuming the 90 days horizon Robex Resources is expected to generate 10.63 times more return on investment than Leviathan Gold. However, Robex Resources is 10.63 times more volatile than Leviathan Gold. It trades about 0.09 of its potential returns per unit of risk. Leviathan Gold is currently generating about 0.01 per unit of risk. If you would invest  239.00  in Robex Resources on September 13, 2024 and sell it today you would lose (86.00) from holding Robex Resources or give up 35.98% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	59.38%
Values	Daily Returns

Robex Resources  vs.  Leviathan Gold

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.

Leviathan Gold

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Leviathan Gold are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical and fundamental indicators, Leviathan Gold reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Robex Resources and Leviathan Gold

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

The idea behind Robex Resources and Leviathan Gold 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.