Correlation Between Tinka Resources and Regulus Resources

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

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

Diversification Opportunities for Tinka Resources and Regulus Resources

0.37

Correlation Coefficient

Tinka Resources  Regulus Resources

Weak diversification

The 3 months correlation between Tinka and Regulus is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tinka Resources Limited and Regulus Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regulus Resources and Tinka 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 Tinka Resources Limited 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 Tinka Resources i.e., Tinka Resources and Regulus Resources go up and down completely randomly.

Pair Corralation between Tinka Resources and Regulus Resources

Given the investment horizon of 90 days Tinka Resources Limited is expected to under-perform the Regulus Resources. In addition to that, Tinka Resources is 1.93 times more volatile than Regulus Resources. It trades about -0.06 of its total potential returns per unit of risk. Regulus Resources is currently generating about -0.01 per unit of volatility. If you would invest  205.00  in Regulus Resources on September 13, 2024 and sell it today you would lose (5.00) from holding Regulus Resources or give up 2.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tinka Resources Limited  vs.  Regulus Resources

Tinka Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tinka Resources Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

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. In spite of fairly stable basic indicators, Regulus Resources is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Tinka Resources and Regulus Resources

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

The idea behind Tinka Resources Limited and Regulus 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.