Correlation Between Regulus Resources and Green Technology

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

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

Diversification Opportunities for Regulus Resources and Green Technology

0.18

Correlation Coefficient

Regulus Resources  Green Technology

Average diversification

The 3 months correlation between Regulus and Green is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Regulus Resources and Green Technology Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Technology Metals and Regulus 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 Regulus Resources are associated (or correlated) with Green Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Technology Metals has no effect on the direction of Regulus Resources i.e., Regulus Resources and Green Technology go up and down completely randomly.

Pair Corralation between Regulus Resources and Green Technology

Assuming the 90 days horizon Regulus Resources is expected to generate 0.21 times more return on investment than Green Technology. However, Regulus Resources is 4.82 times less risky than Green Technology. It trades about -0.02 of its potential returns per unit of risk. Green Technology Metals is currently generating about -0.21 per unit of risk. If you would invest  146.00  in Regulus Resources on September 14, 2024 and sell it today you would lose (4.00) from holding Regulus Resources or give up 2.74% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Regulus Resources  vs.  Green Technology Metals

Regulus Resources

Risk-Adjusted Performance

0 of 100

Very Weak

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

Green Technology Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Green Technology Metals 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 essential indicators 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 Regulus Resources and Green Technology

The main advantage of trading using opposite Regulus Resources and Green Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Regulus Resources position performs unexpectedly, Green Technology 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 Green Technology will offset losses from the drop in Green Technology's long position.

The idea behind Regulus Resources and Green Technology Metals 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.