Correlation Between Loncor Gold and Robex Resources

Can any of the company-specific risk be diversified away by investing in both Loncor Gold 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 Loncor Gold and Robex Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Loncor Gold and Robex Resources, you can compare the effects of market volatilities on Loncor Gold 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 Loncor Gold with a short position of Robex Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loncor Gold and Robex Resources.

Diversification Opportunities for Loncor Gold and Robex Resources

0.27

Correlation Coefficient

Loncor Gold  Robex Resources

Modest diversification

The 3 months correlation between Loncor and Robex is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Loncor Gold and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and Loncor Gold 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 Loncor Gold 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 Loncor Gold i.e., Loncor Gold and Robex Resources go up and down completely randomly.

Pair Corralation between Loncor Gold and Robex Resources

If you would invest  26.00  in Loncor Gold on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Loncor Gold or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	4.55%
Values	Daily Returns

Loncor Gold  vs.  Robex Resources

Loncor Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loncor Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Loncor Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Robex Resources

Risk-Adjusted Performance

0 of 100

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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Loncor Gold and Robex Resources

The main advantage of trading using opposite Loncor Gold and Robex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loncor Gold 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 Loncor Gold 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.