Correlation Between South32 and Robex Resources
Can any of the company-specific risk be diversified away by investing in both South32 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 South32 and Robex Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South32 Limited and Robex Resources, you can compare the effects of market volatilities on South32 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 South32 with a short position of Robex Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of South32 and Robex Resources.
Diversification Opportunities for South32 and Robex Resources
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South32 and Robex is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding South32 Limited and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and South32 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 South32 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 South32 i.e., South32 and Robex Resources go up and down completely randomly.
Pair Corralation between South32 and Robex Resources
Assuming the 90 days horizon South32 Limited is expected to generate 0.86 times more return on investment than Robex Resources. However, South32 Limited is 1.16 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 -0.01 per unit of risk. If you would invest 229.00 in South32 Limited on September 3, 2024 and sell it today you would lose (2.00) from holding South32 Limited or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.64% |
| Values | Daily Returns |
South32 Limited vs. Robex Resources
Performance |
| Timeline |
| South32 Limited |
| Robex Resources |
South32 and Robex Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South32 and Robex Resources
The main advantage of trading using opposite South32 and Robex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South32 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.| South32 vs. IGO Limited | South32 vs. Anglo American PLC | South32 vs. TNG Limited | South32 vs. Amarc Resources |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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