Correlation Between Torex Gold and Robex Resources

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

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

Diversification Opportunities for Torex Gold and Robex Resources

-0.03

Correlation Coefficient

Torex Gold  Robex Resources

Good diversification

The 3 months correlation between Torex and Robex is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Torex Gold Resources and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and Torex 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 Torex Gold Resources are associated (or correlated) with Robex Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Robex Resources has no effect on the direction of Torex Gold i.e., Torex Gold and Robex Resources go up and down completely randomly.

Pair Corralation between Torex Gold and Robex Resources

Assuming the 90 days horizon Torex Gold is expected to generate 14.24 times less return on investment than Robex Resources. But when comparing it to its historical volatility, Torex Gold Resources is 1.33 times less risky than Robex Resources. It trades about 0.02 of its potential returns per unit of risk. Robex Resources is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Robex Resources on December 4, 2024 and sell it today you would earn a total of  33.00  from holding Robex Resources or generate 20.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Torex Gold Resources  vs.  Robex Resources

Torex Gold Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Torex Gold Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Torex Gold is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Robex Resources

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Robex Resources are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental drivers, Robex Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Torex Gold and Robex Resources

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

The idea behind Torex Gold Resources and Robex 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.