Correlation Between SCI Engineered and Robex Resources

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

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

Diversification Opportunities for SCI Engineered and Robex Resources

0.24

Correlation Coefficient

SCI Engineered  Robex Resources

Modest diversification

The 3 months correlation between SCI and Robex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding SCI Engineered Materials and Robex Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Robex Resources and SCI Engineered 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 SCI Engineered Materials 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 SCI Engineered i.e., SCI Engineered and Robex Resources go up and down completely randomly.

Pair Corralation between SCI Engineered and Robex Resources

Given the investment horizon of 90 days SCI Engineered Materials is expected to generate 1.5 times more return on investment than Robex Resources. However, SCI Engineered is 1.5 times more volatile than Robex Resources. It trades about 0.0 of its potential returns per unit of risk. Robex Resources is currently generating about -0.01 per unit of risk. If you would invest  436.00  in SCI Engineered Materials on May 26, 2025 and sell it today you would lose (11.00) from holding SCI Engineered Materials or give up 2.52% of portfolio value over 90 days.

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

SCI Engineered Materials  vs.  Robex Resources

SCI Engineered Materials

Risk-Adjusted Performance

Weakest

Over the last 90 days SCI Engineered Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, SCI Engineered is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Robex Resources

Risk-Adjusted Performance

Weakest

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

Pair Trading with SCI Engineered and Robex Resources

The main advantage of trading using opposite SCI Engineered and Robex Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Engineered 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 SCI Engineered Materials 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.