Correlation Between Aston Bay and Forsys Metals
Can any of the company-specific risk be diversified away by investing in both Aston Bay and Forsys Metals 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 Aston Bay and Forsys Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aston Bay Holdings and Forsys Metals Corp, you can compare the effects of market volatilities on Aston Bay and Forsys Metals 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 Aston Bay with a short position of Forsys Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aston Bay and Forsys Metals.
Diversification Opportunities for Aston Bay and Forsys Metals
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aston and Forsys is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aston Bay Holdings and Forsys Metals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Forsys Metals Corp and Aston Bay 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 Aston Bay Holdings are associated (or correlated) with Forsys Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Forsys Metals Corp has no effect on the direction of Aston Bay i.e., Aston Bay and Forsys Metals go up and down completely randomly.
Pair Corralation between Aston Bay and Forsys Metals
Assuming the 90 days horizon Aston Bay Holdings is expected to generate 2.41 times more return on investment than Forsys Metals. However, Aston Bay is 2.41 times more volatile than Forsys Metals Corp. It trades about 0.06 of its potential returns per unit of risk. Forsys Metals Corp is currently generating about 0.04 per unit of risk. If you would invest 2.50 in Aston Bay Holdings on September 2, 2024 and sell it today you would earn a total of 4.50 from holding Aston Bay Holdings or generate 180.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aston Bay Holdings vs. Forsys Metals Corp
Performance |
| Timeline |
| Aston Bay Holdings |
| Forsys Metals Corp |
Aston Bay and Forsys Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aston Bay and Forsys Metals
The main advantage of trading using opposite Aston Bay and Forsys Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aston Bay position performs unexpectedly, Forsys Metals 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 Forsys Metals will offset losses from the drop in Forsys Metals' long position.| Aston Bay vs. Laramide Resources | Aston Bay vs. Chibougamau Independent Mines | Aston Bay vs. Avrupa Minerals | Aston Bay vs. Thunderstruck Resources |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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