Correlation Between Robex Resources and Montage Gold
Can any of the company-specific risk be diversified away by investing in both Robex Resources and Montage 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 Robex Resources and Montage Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Robex Resources and Montage Gold Corp, you can compare the effects of market volatilities on Robex Resources and Montage 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 Robex Resources with a short position of Montage Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Robex Resources and Montage Gold.
Diversification Opportunities for Robex Resources and Montage Gold
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Robex and Montage is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Robex Resources and Montage Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Montage Gold Corp and Robex 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 Robex Resources are associated (or correlated) with Montage Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Montage Gold Corp has no effect on the direction of Robex Resources i.e., Robex Resources and Montage Gold go up and down completely randomly.
Pair Corralation between Robex Resources and Montage Gold
Assuming the 90 days horizon Robex Resources is expected to generate 0.85 times more return on investment than Montage Gold. However, Robex Resources is 1.17 times less risky than Montage Gold. It trades about -0.25 of its potential returns per unit of risk. Montage Gold Corp is currently generating about -0.24 per unit of risk. If you would invest 189.00 in Robex Resources on September 1, 2024 and sell it today you would lose (24.00) from holding Robex Resources or give up 12.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Robex Resources vs. Montage Gold Corp
Performance |
| Timeline |
| Robex Resources |
| Montage Gold Corp |
Robex Resources and Montage Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Robex Resources and Montage Gold
The main advantage of trading using opposite Robex Resources and Montage Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Robex Resources position performs unexpectedly, Montage 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 Montage Gold will offset losses from the drop in Montage Gold's long position.| Robex Resources vs. South32 Limited | Robex Resources vs. NioCorp Developments Ltd | Robex Resources vs. HUMANA INC | Robex Resources vs. SCOR PK |
| Montage Gold vs. Aurion Resources | Montage Gold vs. Rio2 Limited | Montage Gold vs. Palamina Corp | Montage Gold vs. BTU Metals Corp |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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