Correlation Between VR Resources and KGL Resources

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

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

Diversification Opportunities for VR Resources and KGL Resources

0.3

Correlation Coefficient

VR Resources  KGL Resources

Weak diversification

The 3 months correlation between VRRCF and KGL is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding VR Resources and KGL Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KGL Resources and VR 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 VR Resources are associated (or correlated) with KGL Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KGL Resources has no effect on the direction of VR Resources i.e., VR Resources and KGL Resources go up and down completely randomly.

Pair Corralation between VR Resources and KGL Resources

Assuming the 90 days horizon VR Resources is expected to generate 7.17 times more return on investment than KGL Resources. However, VR Resources is 7.17 times more volatile than KGL Resources. It trades about 0.03 of its potential returns per unit of risk. KGL Resources is currently generating about -0.12 per unit of risk. If you would invest  1.69  in VR Resources on August 24, 2025 and sell it today you would lose (0.54) from holding VR Resources or give up 31.95% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.48%
Values	Daily Returns

VR Resources  vs.  KGL Resources

VR Resources

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in VR Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, VR Resources reported solid returns over the last few months and may actually be approaching a breakup point.

KGL Resources

Risk-Adjusted Performance

Weakest

Over the last 90 days KGL 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 primary indicators remain nearly stable which may send shares a bit higher in December 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with VR Resources and KGL Resources

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

The idea behind VR Resources and KGL 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.