Correlation Between Fannie Mae and Thor Mining
Can any of the company-specific risk be diversified away by investing in both Fannie Mae and Thor Mining 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 Fannie Mae and Thor Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fannie Mae and Thor Mining PLC, you can compare the effects of market volatilities on Fannie Mae and Thor Mining 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 Fannie Mae with a short position of Thor Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fannie Mae and Thor Mining.
Diversification Opportunities for Fannie Mae and Thor Mining
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Fannie and Thor is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Fannie Mae and Thor Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Mining PLC and Fannie Mae 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 Fannie Mae are associated (or correlated) with Thor Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Mining PLC has no effect on the direction of Fannie Mae i.e., Fannie Mae and Thor Mining go up and down completely randomly.
Pair Corralation between Fannie Mae and Thor Mining
Assuming the 90 days trading horizon Fannie Mae is expected to generate 1.55 times more return on investment than Thor Mining. However, Fannie Mae is 1.55 times more volatile than Thor Mining PLC. It trades about 0.14 of its potential returns per unit of risk. Thor Mining PLC is currently generating about -0.05 per unit of risk. If you would invest 48.00 in Fannie Mae on November 1, 2024 and sell it today you would earn a total of 510.00 from holding Fannie Mae or generate 1062.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 64.39% |
| Values | Daily Returns |
Fannie Mae vs. Thor Mining PLC
Performance |
| Timeline |
| Fannie Mae |
| Thor Mining PLC |
Fannie Mae and Thor Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fannie Mae and Thor Mining
The main advantage of trading using opposite Fannie Mae and Thor Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fannie Mae position performs unexpectedly, Thor Mining 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 Thor Mining will offset losses from the drop in Thor Mining's long position.| Fannie Mae vs. Synthomer plc | Fannie Mae vs. Ecclesiastical Insurance Office | Fannie Mae vs. Livermore Investments Group | Fannie Mae vs. Lindsell Train Investment |
| Thor Mining vs. Givaudan SA | Thor Mining vs. Antofagasta PLC | Thor Mining vs. Ferrexpo PLC | Thor Mining vs. Atalaya Mining |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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