Correlation Between Serabi Gold and Rugby Mining

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

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

Diversification Opportunities for Serabi Gold and Rugby Mining

-0.51

Correlation Coefficient

Serabi Gold  Rugby Mining

Excellent diversification

The 3 months correlation between Serabi and Rugby is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Serabi Gold PLC and Rugby Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rugby Mining Limited and Serabi Gold 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 Serabi Gold PLC are associated (or correlated) with Rugby Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rugby Mining Limited has no effect on the direction of Serabi Gold i.e., Serabi Gold and Rugby Mining go up and down completely randomly.

Pair Corralation between Serabi Gold and Rugby Mining

Assuming the 90 days trading horizon Serabi Gold PLC is expected to generate 0.3 times more return on investment than Rugby Mining. However, Serabi Gold PLC is 3.34 times less risky than Rugby Mining. It trades about 0.14 of its potential returns per unit of risk. Rugby Mining Limited is currently generating about 0.02 per unit of risk. If you would invest  190.00  in Serabi Gold PLC on December 1, 2024 and sell it today you would earn a total of  85.00  from holding Serabi Gold PLC or generate 44.74% return on investment over 90 days.

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

Serabi Gold PLC  vs.  Rugby Mining Limited

Serabi Gold PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Serabi Gold PLC are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very abnormal forward indicators, Serabi Gold displayed solid returns over the last few months and may actually be approaching a breakup point.

Rugby Mining Limited

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rugby Mining Limited are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Rugby Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Serabi Gold and Rugby Mining

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

The idea behind Serabi Gold PLC and Rugby Mining Limited 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.

Check out your portfolio center.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.