Correlation Between Robex Resources and Rupert Resources

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

Diversification Opportunities for Robex Resources and Rupert Resources

0.11

Correlation Coefficient

Robex Resources  Rupert Resources

Average diversification

The 3 months correlation between Robex and Rupert is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Robex Resources and Rupert Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rupert 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 Rupert Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rupert Resources has no effect on the direction of Robex Resources i.e., Robex Resources and Rupert Resources go up and down completely randomly.

Pair Corralation between Robex Resources and Rupert Resources

Assuming the 90 days horizon Robex Resources is expected to under-perform the Rupert Resources. In addition to that, Robex Resources is 1.21 times more volatile than Rupert Resources. It trades about -0.16 of its total potential returns per unit of risk. Rupert Resources is currently generating about 0.04 per unit of volatility. If you would invest  286.00  in Rupert Resources on September 14, 2024 and sell it today you would earn a total of  12.00  from holding Rupert Resources or generate 4.2% return on investment over 90 days.

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

Robex Resources  vs.  Rupert 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Rupert Resources

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Rupert Resources are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Rupert Resources 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 Rupert Resources

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

The idea behind Robex Resources and Rupert 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.