Correlation Between Nine Mile and Robex Resources

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Can any of the company-specific risk be diversified away by investing in both Nine Mile 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 Nine Mile and Robex Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nine Mile Metals and Robex Resources, you can compare the effects of market volatilities on Nine Mile 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 Nine Mile with a short position of Robex Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nine Mile and Robex Resources.

Diversification Opportunities for Nine Mile and Robex Resources

0.11
  Correlation Coefficient

Average diversification

The 3 months correlation between Nine and Robex is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nine Mile Metals and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and Nine Mile 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 Nine Mile Metals 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 Nine Mile i.e., Nine Mile and Robex Resources go up and down completely randomly.

Pair Corralation between Nine Mile and Robex Resources

Assuming the 90 days horizon Nine Mile is expected to generate 5526.46 times less return on investment than Robex Resources. But when comparing it to its historical volatility, Nine Mile Metals is 22.47 times less risky than Robex Resources. It trades about 0.0 of its potential returns per unit of risk. Robex Resources is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  22.00  in Robex Resources on September 1, 2024 and sell it today you would earn a total of  143.00  from holding Robex Resources or generate 650.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy68.57%
ValuesDaily Returns

Nine Mile Metals  vs.  Robex Resources

 Performance 
       Timeline  
Nine Mile Metals 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Nine Mile Metals are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Nine Mile reported solid returns over the last few months and may actually be approaching a breakup point.
Robex Resources 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Robex Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Nine Mile and Robex Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nine Mile and Robex Resources

The main advantage of trading using opposite Nine Mile and Robex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nine Mile 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.
The idea behind Nine Mile Metals and Robex Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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