Correlation Between RTG Mining and Royal Road

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

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

Diversification Opportunities for RTG Mining and Royal Road

0.04

Correlation Coefficient

RTG Mining  Royal Road

Significant diversification

The 3 months correlation between RTG and Royal is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding RTG Mining and Royal Road Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Road Minerals and RTG Mining 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 RTG Mining are associated (or correlated) with Royal Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Road Minerals has no effect on the direction of RTG Mining i.e., RTG Mining and Royal Road go up and down completely randomly.

Pair Corralation between RTG Mining and Royal Road

Assuming the 90 days trading horizon RTG Mining is expected to generate 4.47 times more return on investment than Royal Road. However, RTG Mining is 4.47 times more volatile than Royal Road Minerals. It trades about 0.1 of its potential returns per unit of risk. Royal Road Minerals is currently generating about 0.03 per unit of risk. If you would invest  3.00  in RTG Mining on December 28, 2024 and sell it today you would earn a total of  0.00  from holding RTG Mining or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

RTG Mining  vs.  Royal Road Minerals

RTG Mining

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in RTG Mining are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal technical and fundamental indicators, RTG Mining displayed solid returns over the last few months and may actually be approaching a breakup point.

Royal Road Minerals

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Royal Road Minerals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Royal Road may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with RTG Mining and Royal Road

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

The idea behind RTG Mining and Royal Road Minerals 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.