Correlation Between ZincX Resources and Regulus Resources

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

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

Diversification Opportunities for ZincX Resources and Regulus Resources

0.61

Correlation Coefficient

ZincX Resources  Regulus Resources

Poor diversification

The 3 months correlation between ZincX and Regulus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding ZincX Resources Corp and Regulus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Resources and ZincX Resources 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 ZincX Resources Corp are associated (or correlated) with Regulus Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regulus Resources has no effect on the direction of ZincX Resources i.e., ZincX Resources and Regulus Resources go up and down completely randomly.

Pair Corralation between ZincX Resources and Regulus Resources

Assuming the 90 days horizon ZincX Resources Corp is expected to generate 1.74 times more return on investment than Regulus Resources. However, ZincX Resources is 1.74 times more volatile than Regulus Resources. It trades about 0.09 of its potential returns per unit of risk. Regulus Resources is currently generating about 0.03 per unit of risk. If you would invest  8.00  in ZincX Resources Corp on December 2, 2024 and sell it today you would earn a total of  1.00  from holding ZincX Resources Corp or generate 12.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	97.62%
Values	Daily Returns

ZincX Resources Corp  vs.  Regulus Resources

ZincX Resources Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZincX Resources Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, ZincX Resources showed solid returns over the last few months and may actually be approaching a breakup point.

Regulus Resources

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Regulus Resources are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Regulus Resources may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with ZincX Resources and Regulus Resources

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

The idea behind ZincX Resources Corp and Regulus 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .