Correlation Between Sulliden Minerals and Rugby Mining

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

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

Diversification Opportunities for Sulliden Minerals and Rugby Mining

0.44

Correlation Coefficient

Sulliden Minerals  Rugby Mining

Very weak diversification

The 3 months correlation between Sulliden and Rugby is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sulliden Minerals SA 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 Sulliden Minerals 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 Sulliden Minerals SA 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 Sulliden Minerals i.e., Sulliden Minerals and Rugby Mining go up and down completely randomly.

Pair Corralation between Sulliden Minerals and Rugby Mining

Assuming the 90 days trading horizon Sulliden Minerals SA is expected to under-perform the Rugby Mining. But the stock apears to be less risky and, when comparing its historical volatility, Sulliden Minerals SA is 1.57 times less risky than Rugby Mining. The stock trades about -0.05 of its potential returns per unit of risk. The Rugby Mining Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  5.00  in Rugby Mining Limited on December 1, 2024 and sell it today you would lose (2.50) from holding Rugby Mining Limited or give up 50.0% of portfolio value over 90 days.

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

Sulliden Minerals SA  vs.  Rugby Mining Limited

Sulliden Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sulliden Minerals SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

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 Sulliden Minerals and Rugby Mining

The main advantage of trading using opposite Sulliden Minerals and Rugby Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sulliden Minerals 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 Sulliden Minerals SA 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.

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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.