Correlation Between Castile Resources and Durango Resources

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

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

Diversification Opportunities for Castile Resources and Durango Resources

-0.46

Correlation Coefficient

Castile Resources  Durango Resources

Very good diversification

The 3 months correlation between Castile and Durango is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Castile Resources Limited and Durango Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Durango Resources and Castile 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 Castile Resources Limited are associated (or correlated) with Durango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Durango Resources has no effect on the direction of Castile Resources i.e., Castile Resources and Durango Resources go up and down completely randomly.

Pair Corralation between Castile Resources and Durango Resources

Assuming the 90 days horizon Castile Resources Limited is expected to generate 1.37 times more return on investment than Durango Resources. However, Castile Resources is 1.37 times more volatile than Durango Resources. It trades about 0.11 of its potential returns per unit of risk. Durango Resources is currently generating about 0.01 per unit of risk. If you would invest  3.97  in Castile Resources Limited on August 8, 2025 and sell it today you would earn a total of  2.89  from holding Castile Resources Limited or generate 72.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Castile Resources Limited  vs.  Durango Resources

Castile Resources

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Castile Resources Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Castile Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Durango Resources

Risk-Adjusted Performance

Weakest

Over the last 90 days Durango Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly fragile basic indicators, Durango Resources may actually be approaching a critical reversion point that can send shares even higher in December 2025.

Pair Trading with Castile Resources and Durango Resources

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

The idea behind Castile Resources Limited and Durango 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.