Correlation Between Regis Resources and Cerrado Gold
Can any of the company-specific risk be diversified away by investing in both Regis Resources and Cerrado Gold 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 Regis Resources and Cerrado Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Regis Resources and Cerrado Gold, you can compare the effects of market volatilities on Regis Resources and Cerrado Gold 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 Regis Resources with a short position of Cerrado Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Regis Resources and Cerrado Gold.
Diversification Opportunities for Regis Resources and Cerrado Gold
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Regis and Cerrado is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Regis Resources and Cerrado Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cerrado Gold and Regis 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 Regis Resources are associated (or correlated) with Cerrado Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cerrado Gold has no effect on the direction of Regis Resources i.e., Regis Resources and Cerrado Gold go up and down completely randomly.
Pair Corralation between Regis Resources and Cerrado Gold
Assuming the 90 days horizon Regis Resources is expected to generate 1.21 times less return on investment than Cerrado Gold. But when comparing it to its historical volatility, Regis Resources is 2.79 times less risky than Cerrado Gold. It trades about 0.06 of its potential returns per unit of risk. Cerrado Gold is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 44.00 in Cerrado Gold on September 3, 2024 and sell it today you would lose (20.00) from holding Cerrado Gold or give up 45.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.68% |
| Values | Daily Returns |
Regis Resources vs. Cerrado Gold
Performance |
| Timeline |
| Regis Resources |
| Cerrado Gold |
Regis Resources and Cerrado Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Regis Resources and Cerrado Gold
The main advantage of trading using opposite Regis Resources and Cerrado Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regis Resources position performs unexpectedly, Cerrado Gold 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 Cerrado Gold will offset losses from the drop in Cerrado Gold's long position.| Regis Resources vs. Centerra Gold | Regis Resources vs. Southern Arc Minerals | Regis Resources vs. Coeur Mining | Regis Resources vs. Kinross Gold |
| Cerrado Gold vs. Antioquia Gold | Cerrado Gold vs. Red Pine Exploration | Cerrado Gold vs. Bellevue Gold Limited | Cerrado Gold vs. Asante Gold |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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