Correlation Between Rugby Mining and Q Gold

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

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

Diversification Opportunities for Rugby Mining and Q Gold

0.34

Correlation Coefficient

Rugby Mining  Q Gold

Weak diversification

The 3 months correlation between Rugby and QGR is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Rugby Mining Limited and Q Gold Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Q Gold Resources and Rugby 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 Rugby Mining Limited are associated (or correlated) with Q Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Q Gold Resources has no effect on the direction of Rugby Mining i.e., Rugby Mining and Q Gold go up and down completely randomly.

Pair Corralation between Rugby Mining and Q Gold

Assuming the 90 days horizon Rugby Mining is expected to generate 21.3 times less return on investment than Q Gold. But when comparing it to its historical volatility, Rugby Mining Limited is 2.25 times less risky than Q Gold. It trades about 0.01 of its potential returns per unit of risk. Q Gold Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Q Gold Resources on September 26, 2024 and sell it today you would earn a total of  13.00  from holding Q Gold Resources or generate 433.33% return on investment over 90 days.

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

Rugby Mining Limited  vs.  Q Gold Resources

Rugby Mining Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rugby Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Q Gold Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Q Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly abnormal basic indicators, Q Gold may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Rugby Mining and Q Gold

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

The idea behind Rugby Mining Limited and Q Gold 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.