Correlation Between Matador Mining and Robex Resources
Can any of the company-specific risk be diversified away by investing in both Matador Mining 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 Matador Mining and Robex Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matador Mining Limited and Robex Resources, you can compare the effects of market volatilities on Matador Mining 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 Matador Mining with a short position of Robex Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matador Mining and Robex Resources.
Diversification Opportunities for Matador Mining and Robex Resources
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Matador and Robex is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Matador Mining Limited and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and Matador 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 Matador Mining Limited 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 Matador Mining i.e., Matador Mining and Robex Resources go up and down completely randomly.
Pair Corralation between Matador Mining and Robex Resources
Assuming the 90 days horizon Matador Mining Limited is expected to generate 3.96 times more return on investment than Robex Resources. However, Matador Mining is 3.96 times more volatile than Robex Resources. It trades about 0.11 of its potential returns per unit of risk. Robex Resources is currently generating about -0.01 per unit of risk. If you would invest 4.09 in Matador Mining Limited on August 29, 2024 and sell it today you would earn a total of 2.39 from holding Matador Mining Limited or generate 58.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 38.89% |
| Values | Daily Returns |
Matador Mining Limited vs. Robex Resources
Performance |
| Timeline |
| Matador Mining |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Robex Resources |
Matador Mining and Robex Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matador Mining and Robex Resources
The main advantage of trading using opposite Matador Mining and Robex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matador Mining 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.| Matador Mining vs. Rio2 Limited | Matador Mining vs. Aurion Resources | Matador Mining vs. Norsemont Mining | Matador Mining vs. Minaurum Gold |
| Robex Resources vs. Orefinders Resources | Robex Resources vs. Leviathan Gold | Robex Resources vs. Gold Bull Resources | Robex Resources vs. Rackla Metals |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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