Correlation Between Unigold and Regulus Resources
Can any of the company-specific risk be diversified away by investing in both Unigold 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 Unigold and Regulus Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Unigold and Regulus Resources, you can compare the effects of market volatilities on Unigold 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 Unigold with a short position of Regulus Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unigold and Regulus Resources.
Diversification Opportunities for Unigold and Regulus Resources
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Unigold and Regulus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Unigold and Regulus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Resources and Unigold 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 Unigold 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 Unigold i.e., Unigold and Regulus Resources go up and down completely randomly.
Pair Corralation between Unigold and Regulus Resources
Assuming the 90 days horizon Unigold is expected to generate 4.79 times more return on investment than Regulus Resources. However, Unigold is 4.79 times more volatile than Regulus Resources. It trades about 0.03 of its potential returns per unit of risk. Regulus Resources is currently generating about 0.01 per unit of risk. If you would invest 6.00 in Unigold on August 29, 2024 and sell it today you would lose (0.50) from holding Unigold or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Unigold vs. Regulus Resources
Performance |
| Timeline |
| Unigold |
| Regulus Resources |
Unigold and Regulus Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Unigold and Regulus Resources
The main advantage of trading using opposite Unigold and Regulus Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Unigold 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.| Unigold vs. First Majestic Silver | Unigold vs. Ivanhoe Energy | Unigold vs. Orezone Gold Corp | Unigold vs. Faraday Copper Corp |
| Regulus Resources vs. Tinka Resources Limited | Regulus Resources vs. Mundoro Capital | Regulus Resources vs. Lumina Gold Corp | Regulus Resources vs. Kutcho Copper 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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